Yum China Holdings, Inc. · NYSE:YUMC
Yum China — Q2 2021 Earnings Presentation
26 slides from Yum China's earnings presentation, Jul 28, 2021
Slide 1: Second Quarter 2021 Results
Second Quarter 2021 Results July 2021
Slide 2: Cautionary Statement on Forward-Looking Statements & Non-GAAP Measures
Cautionary Statement on Forward-Looking Statements & Non-GAAP Measures 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 covere
Slide 3: Business Highlights
Business Highlights Appendix – Financial Results Stores in Photos: KFC – Tianjin Guangyuan; Pizza Hut – Nantong Phoenix Plaza 3
Slide 4: Solid Performance in Second Quarter
Solid Performance in Second Quarter +14% +29% +83% 404 +1,069 System Total Operating New stores Increase in sales revenue profit total stores growth1 growth2 growth2 in last 12 months 1 Stated on a constant currency basis. 2 Stated in reported currency, includes the consolidation of Huang Ji Huang f
Slide 5: Accelerated New Store Growth with Attractive Paybacks
Accelerated New Store Growth with Attractive Paybacks Accelerated Store Growth Lower Tier Penetration New Unit Payback1 2021 1H New Stores Total Stores Q1 Q2 719 Gross New 415 404 348 43% 44% ~2 years Stores 178 169 57% 56% 237 315 179 19 1H 20 1H 21 1H Tier 1-2 Tier 3-6 Tier 1-2 Tier 3-6 11,023 9,9
Slide 6: Membership Programs and Super Apps Driving Engagement and Spending
Membership Programs and Super Apps Driving Engagement and Spending 305+ mn ~159 mn ~100 mn ~34 mn KFC Members1 App Downloads Pizza Hut App Downloads from iOS and Members1 from iOS and Android1 Android1 ~62% ~8mn ~54% ~1mn KFC Privilege Pizza Hut Privilege Member Sales2 subscriptions sold2 Member Sal
Slide 7: Delivery Sales Grew Rapidly
Delivery Sales Grew Rapidly Delivery Off-premise % of Company sales Delivery sales growth % of Company sales >55% 29% >45% 18% +74% vs 191 19 Q2 21 Q2 19 Q2 21 Q2 35% 24% ~40% ~30% +41% vs 191 19 Q2 21 Q2 19 Q2 21 Q2 1 Stated on a constant currency basis. Adjusted KFC Delivery sales 2019 to include
Slide 8: Store Remodels and New Formats Keep Our Restaurants Fresh and Relevant
Store Remodels and New Formats Keep Our Restaurants Fresh and Relevant Remodeled stores KFC Small Town Model Pizza Hut Hub & Spoke 424 316 21 Q2 21 1H By Brand 313 226 217 106 123 111 KFC PH 19 1H 20 1H 21 1H Stores in Photos: KFC – Hebi Yulong Shopping Mall, Wuxi Oulehui Shopping Mall; Pizza Hut –
Slide 9: KFC: Resilient Business and Solid Growth
KFC: Resilient Business and Solid Growth Second Quarter 2021 Highlights System sales +14%1 280 Gross new stores Restaurant margin Same-store sales +4%1 16.8% Or approx. -7%2 vs 19’Q2 Transactions -14%2 vs 19’Q2 +860 stores y/y +2.2 ppts y/y Average ticket +8%2 vs 19’Q2 ~86% Digital orders Operating
Slide 10: Innovative Products for Meat Lovers
Innovative Products for Meat Lovers Wagyu and Angus Beef Burgers Crispy Air Chicken Late Night Snacks Double Down with Waffle or Bacon 10
Slide 11: Plenty of Options for Everyone
Plenty of Options for Everyone Regional: Hot-dry Noodles and Steamed Dumplings Summer: Peach Sorbet and Coconut Drinks Plant-based Sichuan Spicy Beef Wrap K-Coffee Oat Milk Latte 11
Slide 12: Attractive Campaigns and Compelling Value Propositions
Attractive Campaigns and Compelling Value Propositions Labor Day Holiday Dragon Boat Festival Member Exclusive Mix and Match Deal Mix and match Festival bucket with rice dumpling ¥49 bucket for 9 items Two items for ¥12 (13 items for ¥99 or 8 items for ¥66) 12
Slide 13: Pizza Hut Delivered Stellar Performance
Pizza Hut Delivered Stellar Performance Second Quarter 2021 Highlights System sales +16%1 64 Gross new stores Restaurant margin Same-store sales +11%1 13.1% Or approx. -3%2 vs 19’Q2 Transactions +9%2 vs 19’Q2 +167 stores y/y +1.9 ppts y/y Average ticket -11%2 vs 19’Q2 ~84% Digital orders Operating p
Slide 14: Amazing Product Innovations
Amazing Product Innovations Fusion Style Hand-tossed Pizza Dough Upgrade with 13 New Flavors Afternoon Tea Set Shanxi Sliced Noodles Combining western style cooking 20+ choices from RMB 49 Campaign with cosmetics brand with traditional Chinese noodles 14
Slide 15: Great Value for All Occasions
Great Value for All Occasions Return of Buffet One-Person Meal Set Delivery Promotion Cross-brand Privilege Buy 1 Get 3 memberships 5 days only – Member price at ¥158 Weekdays only A la carte price above ¥110 less ¥50 ¥128 for 1 year 15
Slide 16: New stores in Q2 Total stores as of Q2
9 New stores in Q2 14 Total stores as of Q2 Shanghai JinMao Tower 16
Slide 17: 2021 Outlook and Strategic Priorities
2021 Outlook and Strategic Priorities 2021 • ~1,300 gross new stores FINANCIAL • ~$700-$800 million Capex TARGETS • Focus on our core – good food, great value and customer experience • Attract customers back to stores and capture off-premise demand STRATEGIC • Accelerate store network expansion and
Slide 18: Appendix – Financial Results
Business Highlights Appendix – Financial Results Stores in Photos: KFC – Tianjin Guangyuan; Pizza Hut – Nantong Phoenix Plaza 18
Slide 19: Solid Performance in First Half 2021
Solid Performance in First Half 2021 +24% +37% +156% 719 +1,069 System Total Operating New stores Increase in sales revenue profit total stores growth1 growth2 growth2 in last 12 months 1 Stated on a constant currency basis. 2 Stated in reported currency, includes the consolidation of Huang Ji Huang
Slide 20: Q2 Results Improved Year-over-year
Q2 Results Improved Year-over-year Sales Growth1 Profit Margin Net Income & EPS System sales growth (%) Restaurant Margin (%) Net Income (NI) (US$ mn) 24% 16.7% 17.3% 411 400 14% 14.7%13.7%15.8% 10% 10% 12.2% 178 181 194 132 -4% -13% Q2 YTD Q2 YTD Q2 YTD Same-store sales growth (%) Operating Profit
Slide 21: Solid Sales Growth and Operating Profit
Solid Sales Growth and Operating Profit +37% 5.01 4.43 575 3.66 507 Total +29% Operating 2.45 Profit +156% Revenue 2.12 1.90 +83% 233 225 (US$bn) (US$mn) 204 128 Q2 YTD Q2 YTD Key factors for Q2 year-over-year growth Key factors for Q2 year-over-year growth + New unit contribution + New unit contrib
Slide 22: KFC: System Sales Growth and Solid Margin
KFC: System Sales Growth and Solid Margin Sales Growth1 (%) Restaurant Margin (%) Operating Profit2 (US$ mn) System sales growth 19% 12% 14% 12% 567 18.1% 18.4% 16.8% 493 16.1% 14.6% -6% 14.1% -10% Q2 YTD 312 240 Same-store sales growth 205 159 5% 4% 5% 5% Q2 YTD Q2 YTD -10% -11% Q2 YTD 1 Stated on
Slide 23: Pizza Hut: Margin and Operating Profit Growth
Pizza Hut: Margin and Operating Profit Growth Sales Growth1 (%) Restaurant Margin (%) Operating Profit2 (US$ mn) System sales growth 33% 16% 99 4% 3% 14.2% 13.1% 12.9% 79 -12% 11.3%11.2% -25% Q2 YTD 39 6.4% 29 Same-store sales growth 15 23% 11% 1% 1% (13) Q2 YTD Q2 YTD -12% -22% Q2 YTD 1 Stated on a
Slide 24: Vast Membership Program and Digital Platform
Vast Membership Program and Digital Platform Members (mn) Member Sales1 Digital Order2 62% 62% 86% 86% 305+ 54% 275+ 44% 62% 215+ 160+ 18 YE 19 YE 20 YE 21 Q2 18 FY 19 FY 20 FY 21 Q2 19 Q2 20 Q2 21 Q2 52% 54% 44% 46% 84% ~100 85+ 61% 70+ 50+ 29% 18 YE 19 YE 20 YE 21 Q2 18 FY 19 FY 20 FY 21 Q2 19 Q2
Slide 25: Capital Allocation
Capital Allocation Cash Capital Expenditure Shareholder Returns M&A and Investment US$4.3 bn cash and short To accelerate store expansion and US$1.3bn (since spin-off) To remain disciplined and explore term investment remodeling opportunities in: Resumed cash dividends in Strong operating
Slide 26: Reconciliation of Reported Results to Non-GAAP Measures
Reconciliation of Reported Results to Non-GAAP Measures Quarter Ended Year to Date Ended 6/30/2021 6/30/2020 6/30/2021 6/30/2020 Non-GAAP Reconciliations Reconciliation of Operating Profit to Adjusted Operating Profit Operating Profit $ 233 $ 128 $ 575 $ 225 Special Items, Operating Profit (4 ) (4 )