Yum China Holdings, Inc. · NYSE:YUMC
Yum China — Investor Day (2023)
25 slides from Yum China's investor day presentation, 2023
Slide 1: Warton Wang, General Manager, KFC
Warton Wang General Manager, KFC 1
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: Prospect, Strategy and Vision
Prospect: Huge Potential Ahead Strategy: RGM 2.0 Vision: The Leading Brand in China’s Restaurant Industry 3
Slide 4: Grow with China
Grow with China Store Development Food Innovation More Occasions Digitalization 1987 2003 2006 2015 1st store opened Innovated local Launched Rolled out in Beijing style products delivery services digital payment 1,900+ >15 products in ~$3bn ~89 % the “$100mn cities and towns 1 delivery sales 2 digi
Slide 5: Build to Last
Build to Last Store Footprint1 Transactions2 Members1 Super APP MAU 3 9,500+ 1.3bn+ 410mn+ 28mn+ KFC has proudly served Chinese consumers for 36 years 1. As of 2023 1H 2. Rolling 12 months from Jul 1, 2022 to Jun 30, 2023 3. 2023 1H 5
Slide 6: Huge Potential Ahead: More Footprint, More Trade Zones
Huge Potential Ahead Build Market Share More Footprint More Trade Zones KFC city coverage New trade zones for KFC Highway service centers KFC 3,000+ 2,700+ Entered: 190+ stores 2,200+ 1,100+ 1,200+ Total: 6,600+ Potential 1,000+ Other 1,900+ 1,500+ Hospitals QSR Entered 1,200+ brands 2019 2021 2023
Slide 7: Huge Potential Ahead: More Target Consumers, Higher Frequency
Huge Potential Ahead Build Market Share More Target Consumers Higher Frequency Annual Frequency 1 KFC K Friends ~100 College Small-town ~26 students youth Other Privilege Members QSR brands Existing Members ~6 Value New and conscious Seniors Reactivated Members ~3 group 1. Rolling 12 months from Jul
Slide 8: Going Forward: From RGM1.0 to RGM2.0
Going Forward: From RGM1.0 to RGM2.0 Growth Resilience Moat Footprint Growth | Sales Growth | Profit Growth 8
Slide 9: Maintain new store payback
Annual KFC Net New Stores Average New Store Cash Investment 1 RMB mn CAGR 22% CAGR (-9%) 2.3+ 2.2+ 1,000+ 2.1+ 900+ 1.9+ 1.5+ 620+ 630+ 420+ 2018 2019 2020 2021 2022 2023E 2018 2019 2020 2021 2022 2023E Maintain new store payback at 1. Excludes VAT 9
Slide 10: Flexible Store Models with Multiple Add-on Options
Flexible Store Models with Multiple Add-on Options 4 Store Models Standard (~180㎡) Future (Customized design) Mini (~120㎡) Low-tier (150~200㎡) Multiple Modules Drive–Through To-Go Window Side by Side KCOFFEE Truck Mini Station 1
Slide 11: Collaborate with Local Operators to Expand Footprint
Collaborate with Local Operators to Expand Footprint Strategic Locations Lower-tier Cities & Remote Areas Taizhou Service Center Tai Mountain Resort Nagqu, Tibet Wenzhou Small Town Highway Service Centers Tourist Locations Lower-tier Cities Zhongyuan West Service Center HAINAN ISLAND Hainan Sinopec
Slide 12: New Categories Offer More Variety
New Categories Offer More Variety Whole Chicken Beef Burger Launched in 20221 Launched in 20211 $100mn+ 2 $250mn+ 2 1. Launched as permanent menu items 2. 2022 sales 12
Slide 13: Expanded Price Ranges: From Entry to Premium
Expanded Price Ranges: From Entry to Premium Premium Core Entry 13 1. Percentage based on 2023 1H sales from main course items
Slide 14: Innovative Products
Innovative Products Chicken Taco Double Down K-zza ~19mn Units sold1 ~9mn Units sold1 ~7mn Units sold1 1. Units sold during limited-time-offer window in 2023 14
Slide 15: Strengthen KFC's Unique Brand Identity with Signature Campaigns
Strengthen KFC’s Unique Brand Identity with Signature Campaigns Sunday Crazy Thursday Buy More Save More Classics at Old Prices User Generated Content Lucky Draw 15
Slide 16: Never Stop Seeking New Growth Pillars
Never Stop Seeking New Growth Pillars Toys & Games KCOFFEE New Explorations Product New Retail Psyduck/Sanrio 可达鸭/三丽鸥 Haikyu!! Campaign KFC Grandpa’s Tea Teens in Times Model KPRO 16
Slide 17: Rebase cost structure
Increased Automation in Added Flexibility with Tech- Cleaning Mega RGM Cost empowered elasticity Inventory replenishment Variable lease components efficiency Labor scheduling Rebase cost structure More Centralized Recruiting Resource Greater Consolidation in Centralization pooling Trai
Slide 18: Through Loyalty Programs & Digital Stores
Through Loyalty Programs & Digital Stores Members Digital Stores Privilege Privilege subscriptions Mini Existing program Retention & Super APP frequency New & 29% Recruitment & reactivated activation Delivery Local Non-members aggregators services 18
Slide 19: RGM No. 1 Customer Mania 2.0
Customer Mania 2.0 RGM No. 1 Focus Hear from Enhance customers transparency 聚焦 为客疯狂 2.0 Solve Respond 赋能 沟通 problems quickly Empowerment Communication
Slide 20: Next Milestone – 10,000 Stores
Next Milestone – 10,000 Stores 20
Slide 21: The Leading Brand in China's Restaurant Industry
Our Vision The Leading Brand in China’s Restaurant Industry 21
Slide 22: Time-honored Classics, Non-stop Innovation, Consistent Taste
传承经典 创新不止 出品稳定 Time-honored Non-stop Consistent Classics Innovation Taste 22
Slide 23: Affordable Everyday, Accessible Anywhere
买得起 随时随地 Affordable Accessible everyday anywhere 23
Slide 24: Respect First, Customer Mania, Caring Community, Social Responsibility
尊重为先 为客疯狂 相互温暖 社会责任 Respect Customer Caring Social First Mania Community Responsibility 24
Slide 25: Go Forward with A Heart of Love
心怀美好，倾心向前 Go Forward with A Heart of Love 25