McDonald's Turnaround Restructuring Plan Broken Down

McDonald's Corporation MCD on Monday announced "initial steps" of a turnaround plan which includes a restructuring of McDonald's worldwide business and financial updates.

"Today we are announcing the initial steps to reset and turn around our business," McDonald's CEO Steve Easterbrook said in a press release. "As we look to shape McDonald's future as a modern, progressive burger company, our priorities are threefold - driving operational growth, returning excitement to our brand and unlocking financial value."

New Market Segments

As of July 1, 2015, McDonald's will operate under a new organization structure with four segments:

• The United States.
• International Lead Markets: Established markets such as Canada and the U.K.
• High-Growth Markets: Markets with "relatively higher" expansion potential such as South Korea and China.
• Foundational Markets: Remaining markets that have the potential to operate under a largely franchised model.

Leadership Team Appointed

Mike Andres will continue to serve as President – McDonald's U.S. Doug Goare, currently President – McDonald's Europe, will become President – International Lead Markets. In addition, Dave Hoffman, President – McDonald's Asia/Pacific, Middle East and Africa (APMEA) will assume the new title as President – High-Growth Markets while Ian Border, currently Chief Financial Officer – McDonald's APMEA has been appointed as President – Foundational Markets.

Refranchising Target And Financial Updates

As part of the initial turnaround plan, McDonald's announced the following objectives:

• Refranchise 3,500 restaurants by the end of 2018.
• Deliver approximately $300 million in net annual G&A savings, most of which will be realized by the end of 2017.
• Return $8 billion to $9 billion to shareholders in 2015.
• Return $18 billion to $20 billion to shareholders by the end of 2016, consistent with its prior three-year commitment.