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First on CNBC: CNBC Excerpts: McDonald’s CEO Steve Easterbrook Speaks with CNBC’s “Squawk on the Street” Today


WHEN: Today, Wednesday, November 11th

WHERE: CNBC's "Squawk on the Street"

Following are excerpts from the unofficial transcript of a FIRST ON CNBC interview with McDonald's CEO Steve Easterbrook on CNBC's "Squawk on the Street" (M-F, 9AM-11AM ET) today. Following are links to the interview on, and

All references must be sourced to CNBC.


We launched the 6thof October, so the third quarter performance we had and turning the business around in the U.S. was actually before we launched all day breakfast. So there's a number of components to what has helped us gather some momentum in the U.S. business. Frankly, the most exciting one for me is customers are telling us we are running better restaurants than we were a year ago.


We are going to continue to invest in the business, so that will add incremental cost. The next savings is 500 million, which is about 20% on our cost space. We think that is a stretch target, it's the right target, because what we don't want to do is impact our ability to grow. And we do not want to disrupt the momentum we are seeing in the business because that is where the greatest value creation is for all stakeholders including shareholders.


The significance of the decision warranted a real deep dive into it. And we did take it seriously because the implications of it, whichever way you go, were significant. When we actually had – and we got independent assessments to make sure we were really kind of objective about it as well. When you balance up the potential value that could be created versus the value that we lost over short, medium and long term and the disruption to the underlying fundamentals of the business. We were confident in the decision we made, both board and management. And absolutely unanimous in that.


The focus on the turnaround is actually to win back the share that we have given up. You know, we have not been particularly delighted with our results the last couple of years, we have given up a bit of market share. Let's win back in the near term competition and then as we build what we call our experience the future. Yeah we will take more IEO share, but in the immediate term, the focus is on running better restaurants and taking some share.


We have been buying back anyway. So I mean, we have been buying back through the 90s so I think that has been smart. And you know, the reality is the business was not in the shape it is today a year ago. And it may not have been the right decision to make, and it wouldn't have been viewed as being made for the right reasons, whereas now, we are confident in our underlying momentum of the business. And we are confident in our plans for 2016, which I signaled yesterday. And I think that means that the timing with interest rates where they are, the strength in the balance sheet and our outlook on trading, it's just a smart business decision.


As a company, for the company-owned restaurants here in the U.S., we made the conscious decision on the 1stof July to go a dollar above the local minimum wage for our company-owned employees. As well as training programs and other opportunities to develop themselves. Our operators are absolutely expert at managing their local pay scales because they are independent operators, they set that themselves. Is there inflation across that line, along with health care and other costs? Yes there is. It is tough. It is tough. That is why we have to get the top line growth so we can absorb cost increases and still carry either profits the company down the bottom line and just importantly, if not more importantly, owner operated cash flow growth.


What I'm hinting at is that traditional industries are getting transformed whether it's hotels, whether it's all sorts of travel, whether it's supermarkets – and we should not be blind to that. So, you know, there are delivery concepts now which are changing people's eating habits. Can we play a role in that? Are we already testing delivery concepts? We have a bigger than a billion dollar delivery business in Asia at the moment. Now the business model works out there. It's not so easy to transport here. But we actually have a lot of deep knowledge and how we can serve customers other than just directly in our restaurants.

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