Yum China Holdings, Inc. · NYSE:YUMC
Yum China — Investor Day (2019)
26 slides from Yum China's investor day presentation, 2019
Slide 1: KFC: Solid Foundation for Growth
KFC SOLID FOUNDATION FOR GROWTH Johnson Huang | KFC 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 Technology #1 QSR in China Long runway for enables innovation growth with an evolving consumer 3 3
Slide 4: Focused Growth Strategy
Focused Growth Strategy Menu Integrated Asset Operational Innovation Marketing Growth Excellence 4
Slide 5: Targeted menu innovation to capture market segments
M E N U •Exciting new products with high perceived value I N N O V A T I O N •Premium whitespace targeting higher tier cities PREMIUM •Targets all consumers in all tiers Targeted menu •Maintain dominance in chicken category •Innovation and excitement at reasonable prices innovation to capture CORE m
Slide 6: Core capabilities build brand perception and value
M E N U I N N O V A T I O N Core capabilities build brand perception and value Crayfish Burger
Slide 7: Core product innovation drives daypart growth
M E N U I N N O V A T I O N Core product innovation drives daypart growth
Slide 8: Disruptive value drives traffic and frequency
Crazy Thursday: Single Bone Chicken M E N U I N N O V A T I O N Disruptive value drives traffic and frequency
Slide 9: Premium products capture additional whitespace
M E N U I N N O V A T I O N I Love Messy Chicken and Cheese Burger Premium products capture additional whitespace
Slide 10: Digital ecosystem increases connectivity and growth
I N T E G R A T E D V-gold Pre Order M A R K E T I N G (Loyalty Points) APP Privilege Membership Program Digital ecosystem Membership increases YUMC Pay connectivity and growth Delivery E Commerce K Music Kiosk 10
Slide 11: Digital orders drive ticket average and productivity
Digital order % of sales Digital payments I N T E G R A T E D M A R K E T I N G 51% 85% Digital orders drive 33% ticket average and 39% productivity ’17 Q4 ’18 Q4 ’16 Q4 ’18 Q4
Slide 12: Targeted marketing increases frequency and profit
Wow members (mn) I N T E G R A T E D M A R K E T I N G 160+ Targeted marketing increases frequency and profit 60+ 48% of Sales ’16 Q4 ’18 Q4 Member sales % in Q4 2018
Slide 13: Privilege memberships drive frequency and cross sells
Privilege Subscription Program Delivery frequency I N T E G R A T E D per month M A R K E T I N G Privilege memberships drive frequency and cross sells Before During
Slide 14: Delivery: ~$1B operation in over 1,100 cities
KFC delivery revenues ($ bn) I N T E G R A T E D M A R K E T I N G 0.9 0.7 Delivery: 0.5 ~$1B operation in 0.4 over 1,100 cities 2015 2016 2017 2018 KFC self-operated store delivery revenues converted at prevailing exchange rate
Slide 15: Dynamic delivery: Better quality better economics
30 min fulfilment I N T E G R A T E D M A R K E T I N G 85% 69% K F C Dynamic delivery: Better quality better economics K F C ’18 Q1 ’18 Q4 15
Slide 16: Showcase: Digital and delivery drive coffee category growth
~90 I N T E G R A T E D cups M A R K E T I N G sold (mn) ~60 Showcase: Digital and delivery drive coffee category growth 2016 2018
Slide 17: Accelerated growth with cash payback ~2 years
Gross new builds A S S E T G R O W T H 566 Accelerated 351 408 323 growth… Cash Payback ~2 years 2015 2016 2017 2018
Slide 18: With continual asset enhancements
Average store age 85% A S S E T G R O W T H ~4 ~3 …with continual asset enhancements… 2015 2018 18
Slide 19: Across multiple formats for every occasion
Commercial Dessert Kiosk Tourist Select A S S E T G R O W T H …across multiple formats Drive Thru Economic Transport Hub Community for every occasion 19
Slide 20: Showcase: Over 1,100 dessert kiosks across multiple models
A S S E T G R O W T H Showcase: Over 1,100 dessert kiosks across Units Ticket multiple models Avg +450 driving growth +36% Since 2016…
Slide 21: Showcase: High speed rail deliveries in 26 stations
Since 2017… A S S E T G R O W T H ~4x #1 Coverage Sales Showcase: Growth High speed rail deliveries in 26 stations
Slide 22: Long runway for growth
KFC coverage KFC restaurants per A S S E T million people G R O W T H Potential 14 Today ~1,000 ~800 8 Long runway 4 for growth 1,200+ 600 China Tier Two Tier One Cities Population (mn) Per Capita GDP $8 $13 $22 China Per Capita GDP per China National Bureau of Statistics; USD (000s) Developed Marke
Slide 23: Our employees are the backbone of our success
O P E R A T I O N A L E X C E L L E N C E Our employees are the backbone of our success…
Slide 24: With a relentless focus on productivity
Transactions per hour O P E R A T I O N A L E X C E L L E N C E …with a relentless focus on productivity 2013 2018 Transactions per Hour denote average number of transactions served per hour of labor
Slide 25: China's leading QSR: Solid foundation for growth
5,910 ~300,000 Best-in-class Stores Workforce Supply Chain China’s leading QSR: Solid foundation for growth 85% Digital 160+mn 92% Delivery Payment Members Coverage 25 Store count, customers and delivery coverage as of YE 2018. Digital payment as of Q4 2018.
Slide 26: Thank You
Ganovation Powering > \ i