Yum China Holdings, Inc. · NYSE:YUMC
Yum China — Investor Day (2019)
28 slides from Yum China's investor day presentation, 2019
Slide 1: Pizza Hut: Always Something New!
PIZZA HUT ALWAYS SOMETHING NEW! Jeff Kuai | Pizza Hut General Manager
Slide 2: Cautionary Statements
Cautionary Statements Forward-Looking Statements. This presentation contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. We intend all forward-looking statements to be covered by the safe harbor
Slide 3: Key Takeaways
Key Takeaways Leveraging Unrivalled Leader 2018 Transition Improved Core in Large & Fast Year with Initial Capabilities to Roll Growing China Success Witnessed Out Transformative WCDR Market in Revitalization Initiatives at Scale in Strategy 2019+ Note: WCDR market is defined as western restaurants
Slide 4: Leader in Rapidly Growing China WCDR Market
Leader in Rapidly Growing China WCDR Market Large China WCDR market with strong growth potential Market leader with ~2,240 stores $ billion ~2,240 ~80 ~74 39 ~20% ~68 34 ~4X ~58 ~40 21 ~41 23 ~39 ~33 ~540 ~22 ~24 ~380 2015E 2016E 2017E 2018E Second Third player player Source: Yum China analysis and
Slide 5: More than pizza: #1 WCDR brand
More than pizza: #1 WCDR brand Dominant leader in multiple food categories in family customer segment Pizza Steak Appetizer Family-friendly, Modern, Value-for-money Leading WCDR Brand in China 5
Slide 6: Broad Footprint With Strong Operational Capabilities
Broad Footprint With Strong Operational Capabilities 2,200+ high traffic locations 50mn+ digital member base World class operational capability 240mn+ customer visits/year Delivery footprint covers 500+ cities 6
Slide 7: Four Levers to Drive Revitalization
2 3 Four Levers to Drive Revitalization I. Fix Fundamentals II. Drive Digital Capabilities Product Innovation New Customer Recruitment Disruptive Value Digital Experience & Engagement Improved Service Monetization Family Engagement IV. Enhance Asset Portfolio III. Grow Delivery Exist
Slide 8: I. Enhanced Pizza Leadership with Multiple Dough Types
I. Enhanced Pizza Leadership with Multiple Dough Types 8
Slide 9: I. Launched Series of Craveable Food
Crayfish pasta I. Launched Series of Craveable Food 9
Slide 10: I. Launched Instagrammable & Social “Buzz Worthy” Desserts & Drinks
I. Launched Instagrammable & Social “Buzz Worthy” Desserts & Drinks 10
Slide 11: I. Launched Instagrammable & Social “Buzz Worthy” Desserts & Drinks
I. Launched Instagrammable & Social “Buzz Worthy” Desserts & Drinks 11
Slide 12: I. Launched Instagrammable & Social “Buzz Worthy” Desserts & Drinks
I. Launched Instagrammable & Social “Buzz Worthy” Desserts & Drinks 12
Slide 13: I. Upgraded Menu and Product Portfolio
I. Upgraded Menu and Product Portfolio 13
Slide 14: I. Ongoing Innovation to Strengthen Leadership in Signature Categories
I. Ongoing Innovation to Strengthen Leadership in Signature Categories Strengthen Pizza Leadership Position Enhance Steak Category Upgrade Dessert and Appetizer 14
Slide 15: I. Piloted Multiple Value Campaigns with Promising Results
I. Piloted Multiple Value Campaigns with Promising Results Everyday Low Price Disruptive Value High Low Price Value Pizza Line Entry Price LTO Products Scream Wednesday Buy One Get One Free Half Price Discount 15
Slide 16: I. Roll Out Disruptive Value Campaign with Improvements
I. Roll Out Disruptive Value Campaign with Improvements Positive Pilot Results National Launch Further Improvement in Plan Drive Traffic Recruit Optimized Offer More Product Varieties for Effectively New Customers From Test Result Scream Wed Platform 16
Slide 17: I. Establish Signature Service to Improve Customer Experience
Key Touchpoints Reception Order Serve Check I. Establish Our Service Proposition Signature Service to Improve Customer Experience Young & Energetic Rapid Service Birthday Surprise Team & More 17
Slide 18: II. Rapidly Expanded Digital Capabilities
II. Rapidly Expanded Digital Capabilities Recruitment & Engagement Monetization CRM Member Cumulative APP Download Member Sales% 50mn+ 16mn 45% +15mn +10mn +16pts User Experience Improvement + Expanded SuperAPP Functions + In Store Digitalization Note: CRM and APP data as of 2018 year-end, member sa
Slide 19: II. Enhance Digital Life Cycle Management
II. Enhance Digital Life Cycle Management Acquisition Experience Upgrade Engagement Churn Prevention Tableside Family privilege ordering Co-branding Frequency Uplift New Customer Recruitment Data bank Identify churn Pre order Welcome characteristics & target for carry out with tailored program
Slide 20: III. Achieved Double-Digit Delivery Sales Growth
III. Achieved Double-Digit Delivery Sales Growth Strengthen The Core Drive Online Traffic Simplified Menu 100% Integrated Own Rider Team Delivery-specific Calendar Member Exclusive Offers 20
Slide 21: III. Further Strengthen Delivery Core Capabilities
III. Further Strengthen Delivery Core Capabilities Strengthen Branding Grow Own Platform Improve Engagement Enhance Operations Upgrade Packaging & Uniform Enhance Multi-layer Calendar Rollout Delivery Privilege Build Delivery Room 21
Slide 22: IV. Launched New Asset Design and Upgraded 225 stores
IV. Launched New Asset Design and Upgraded 225 stores 22
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Slide 25: IV. Further Accelerate Asset Upgrade & Complete Full Refurbishment by 2021
IV. Further Accelerate Asset Upgrade & Complete Full Refurbishment by 2021 ~500 Store Upgrades in 2019 Store Age <3 Years by 2021 25
Slide 26: IV. Continue to Explore Adaptable New Store Formats
IV.Continue to Explore Adaptable New Store Formats to Become Smaller, Faster with Better Support for Delivery SMALLER FASTER WITH BETTER SUPPORT FOR DELIVERY Core Asset Model Hub & Spoke Delivery Support Store Traditional Traditional dine-in store size Dine-in Store -10% -6% Dessert & Drink -13% Des
Slide 27: Customer Perception improved to become young and energetic
Customer Perception improved to become young and energetic, with positive traffic growth in Q4 PIZZA HUT IN PIZZA HUT IN 2017 2018 求生欲很强的 暖男备胎 奋进青年 “My Reliable “Energetic and Backup Determined Boyfriend” Young Man” Source: Yum China consumer survey and focus group study in 2017 & Jan, 2019 27
Slide 28: Ready to roll out transformative initiatives at scale
2018 Ready to roll out 2019 Transition year transformative initiatives at scale Ongoing food innovation Revamped menu Roll out disruptive value campaigns Rebuilt value for money Establish signature service Refocused on family Enhance digital life cycle management Caught up on digital