Yum China Holdings, Inc. · NYSE:YUMC
Yum China — Investor Day (October 2017)
27 slides from Yum China's investor day presentation, Oct 17, 2017
Slide 1: Business Update
Business Update Joey Wat | President & Chief Operating Officer, Yum China Johnson Huang | General Manager of KFC, Yum China
Slide 2: Forward-Looking Statements
Forward-Looking Statements. Our presentation may contain “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 provisions of the Pr
Slide 3: Agenda
Business Overview by Joey Wat Pizza Hut Update by Joey Wat KFC Update by Johnson Huang Agenda
Slide 4: Understanding evolving consumer needs is fundamental to YUMC's success
Food Services Value For Money Understanding evolving consumer needs is fundamental to YUMC’s success
Slide 5: Urban middle class is the fastest growing segment in China
Source: Mckinsey & Company (2012) Urban households annual income growth trend 2000 2010 2020 147 226 328 Women’s share of the labor force (%) High labor force participation rate and women’s share of labor force India Mexico Philippines Argentina South Korea Japan Europe United States Canada Australi
Slide 6: Catering industry still growing at double digits, driven by O2O food delivery
Catering industry is still growing at double digits in China, driven by O2O food delivery (at >50% CAGR) in the past two years Source: National Bureau of Statistics, iResearch estimates (2016) Catering Industry Annual Sales O2O Food Delivery Sales Market kick-off 2015-18e CAGR =51%
Slide 7: China's restaurant sector is highly fragmented; chain restaurant prospects promising
China’s restaurant sector is highly fragmented, and prospects for chain restaurants remain promising Source: Euromonitor (2016), Citi Research
Slide 8: Key success factors for YUMC
World class shared services Scalability Key success factors for YUMC Food! Food! Food! Lifestyle Culture & talent Attractive unit economics Replicable development model Infrastructure Scale Loyalty Operation
Slide 9: Employee engagement and customer satisfaction build shareholder value
Customer Satisfaction Employee Engagement Shareholder Value + = Employee engagement and customer satisfaction are keys to building shareholder value in the long term
Slide 10: Employee engagement is centered around three principles
FAIR 公平 CARE 关心 PRIDE 自豪 Employee engagement is centered around three principles 我们遵循三个原则为员工代言
Slide 11: Pizza Hut Business Update
Pizza Hut Business Update Joey Wat | President & COO of Yum China Pizza Hut Update by Joey Wat
Slide 12: Pizza Hut is the largest western CDR in China
Pizza Hut is the largest western CDR in China 1st store opened in Beijing in 1990 Over 80 million pizzas served annually “Most Preferred Western Casual Dining Restaurant” – Nielson (2016)
Slide 13: Successfully expanded to over 2,100 stores in cities
Successfully expanded to over 2,100 stores in 475 cities Averaging ~80 stores a year over its 27 year history 1,770 373 Pizza Hut Home Service (PHHS) Pizza Hut Casual Dining (PHDI) Note, from 2008 ~ 2013 exclude Pizza Home Express
Slide 14: Sales stabilized in past few quarters; focus on revitalization of the brand
Sales stabilized in the past few quarters, focus now is on revitalization of the Brand Same-store sales growth (y/y) 1 System sales growth (y/y) 1 1Stated in constant currency basis
Slide 15: Biggest challenge of the brand is being outdated
Biggest challenge of the brand is being outdated Pizza Hut in 2017 “暖男备胎” “My Reliable Backup Boyfriend”
Slide 16: Four levers to turn strategy into execution
Four levers to turn strategy into execution I. Fix Fundamentals II. Enhance Digital Capabilities IV. Experiment New Models III. Optimize Delivery Network Product innovation & update Menu rationalization Service and engagement New super APP launch Member privilege upgrade Store image upgrade Bistro m
Slide 17: Series of new products to bring excitement and value
Series of new products to bring excitement and value I
Slide 18: Thin, Chewy, Trendy, and Flavorful new October menu
Thin, Chewy, Trendy, and Flavorful New October menu features innovative & healthy products I Italian Thin Pizza Roasted Vegetables Flavorful and Healthy
Slide 19: Relaxing ordering experience and simplified menus
With a relaxing ordering experience and simplified menus 14_84 18_84 I
Slide 20: Durian Player, Play with FUN
Durian Player, Play with FUN Creative and fun content through diverse channels I
Slide 21: Celebrity endorsements to revamp brand image
Celebrity endorsements to revamp brand image I
Slide 22: Increasing outreach to other key customer groups
Increasing outreach to other key customer groups Build kids market Interact with students I
Slide 23: Operational focus on improving customer service
Operational focus on improving customer service Enable digital experience Engage with customers Simplify service process Improve management & crew retention I
Slide 24: A win and scale approach to fix fundamentals
A win and scale approach to fix fundamentals I “Scale” – Roll-out “Win” – Pilot
Slide 25: Many tests conducted in the pilot stores
上海佛罗伦萨餐厅 Many tests conducted in the pilot stores I
Slide 26: Super App as a platform for a full digital ecosystem
Super App as a platform for a full digital ecosystem. Over 3 million downloads in 2 months K-gold Delivery Member’s Day Exclusive offer Gift Card I I Member count at 30mn by Aug 2017
Slide 27: Pizza Hut catching up with rapid growth in membership and digital payments
Pizza Hut is catching up with rapid growth in membership and digital payments I I Members Mobile payment Mobile payment as % of company sales Loyalty member count Member sales Member sales % of system sales