Yum China Holdings, Inc. · NYSE:YUMC
Yum China — Q1 2022 Earnings Presentation
23 slides from Yum China's earnings presentation, May 3, 2022
Slide 1: First Quarter 2022 Results
First Quarter 2022 Results May 2022
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: Grew Revenue and Delivered Profit in Q1 Despite Significant Challenges from COVID-19
Grew Revenue and Delivered Profit in Q1 Despite Significant Challenges from COVID-19 Q1 2020 2021 2022 Focus on Total stores 9,295 10,725 12,117 Gross new stores 179 315 522 Resiliency Net new stores Revenue 95 $1.75bn $2.56bn 219 329 $2.67bn Growth Operating profit Revenue growth1 $97mn (24)% $342m
Slide 4: Supporting Communities in Need
Supporting Communities in Need Hot Meals to Frontline Workers and Communities Ready-to-Eat Products to Elderly Children’s Book to Quarantine Centers 4
Slide 5: Quickly Launched Community Purchasing to Provide Hot Meals / Ready-to-Eat Products
Quickly Launched Community Purchasing to Provide Hot Meals / Ready-to-Eat Products KFC Pizza Hut Taco Bell Lavazza Little Sheep Minimum 15 sets, ¥188 each Frozen steak combo (5/10/15 Quesadillas set at ¥199, Roasted pork belly (3kg) at ¥297, Hot pot with lamb/beef and (Fried rice, chicken snacks, st
Slide 6: Fulfilling Rising Off-Premise Demand
Fulfilling Rising Off-Premise Demand Delivery Off-premise % of Company sales1 Delivery sales growth 2 % of Company sales1 3 ~70% ~65% 55%+ 36% 32% 30% +15% vs Q1’21 Q1 Q1 ~59% 48% ~41% ~44% 35% 37% +12% vs Q1’21 Q1 Q1 Integrated Community Purchasing 2020 2021 2022 For All YUMC Brands 1 % of Company
Slide 7: Driving Digital Ordering and Member Sales
Driving Digital Ordering and Member Sales Digital Order Members1 Member sales2 % of Company sales3 mn % of System sales ~88% 345+ ~64% ~84% ~87% ~62% 290+ 225+ 2020 Q1 2021 Q1 2022 Q1 ~88% ~63% ~82% 110+ ~60% 90+ ~65% 70+ 1 Cumulative as of period-end KFC privilege subscription – 2 From 2022, in add
Slide 8: Accelerating Store Openings with Healthy New Store Performance
Accelerating Store Openings with Healthy New Store Performance Accelerating Store Growth Penetrated into Lower Tiers Maintained New Unit Payback1 Gross New Stores Q1 22 New Stores Total Stores By Year of Opening 522 ~2 yrs ~2 yrs ~2 yrs 38 43 315 % 57 % 179 62 % % Q1 20 Q1 21 Q1 22 2018 2019 2020 Ti
Slide 9: KFC Remains Resilient
KFC Remains Resilient Q1 2020 2021 2022 Total stores 6,661 7,373 8,441 Net new stores 127 207 273 System sales growth1 (15)% 24% (4)% Same-store sales growth1 (11)% 5% (9)% Restaurant margin 13.6% 19.9% 15.2% Operating profit ($ mn)2 153 327 220 Delivery sales3 ~32% ~30% ~36% Off-premise sales3 ~70%
Slide 10: Campaigns with Abundant Value
Campaigns with Abundant Value Signature Campaign – Chinese New Year – Discount on E-Commerce Delivery / Takeaway Offers Crazy Thursday Golden Bucket Platform 6 selected items at ¥66 Selected items at ¥19.9 or ¥29.9 Save up to ¥101 Save ¥20 on spending ¥200 for members only 10
Slide 11: Product Innovation Across Categories
Product Innovation Across Categories Affordable vs Premium Bringing Back New Retail Packaged Food Juicy Whole Chicken Beef Burgers Our Classic Breakfast Pastry Marinated Chicken Fillet 11
Slide 12: Pizza Hut Accelerated Store Expansion
Pizza Hut Accelerated Store Expansion Q1 2020 2021 2022 Total stores 2,271 2,382 2,679 Net new stores (10) 27 89 System sales growth1 (38)% 57% (1)% Same-store sales growth1 (31)% 38% (5)% Restaurant margin 0.3% 15.3% 10.7% Operating profit ($ mn)2 (28) 60 30 Delivery sales3 ~48% ~35% ~37% Off-premi
Slide 13: Innovative New Products
Innovative New Products Wagyu Beef Pizza with Hairy Crab Pastry Pizza New Retail Packaged Food New Stuffed Crust Pizza Abalone Sauce and Rice Combo 13
Slide 14: Attractive Campaigns with Great Value
Attractive Campaigns with Great Value Signature Scream Wednesday Pizza Buy One Get One Free Chinese New Year Campaign Breakfast starts at ¥10 30% off selected steak, seabass and Choices of Chinese and western Second pizza redeemable in 30 days Big feast for the holiday season pizza – both dine-in an
Slide 15: Capital Allocation Balances Operation Needs, Long-term Growth and Return to Shareholders
Capital Allocation Balances Operation Needs, Long-term Growth and Return to Shareholders Q1 Disciplined Capital Allocation $ million 2020 2021 2022 • Maintain sufficient cash for operations and Cash and short-term investment 1,538 4,110 3,669 contingencies Cash flow from operating activities 60 331
Slide 16: Maintaining Net New Unit and Capex Targets for 2022
Maintaining Net New Unit and Capex Targets for 2022 • Approximately 1,000 to • Capital expenditure in the 1,200 net new stores range of $800 mn to $1 bn • Continue with our • Make significant capex disciplined approach of investments in digital, supply opening high quality new chain infrastructure a
Slide 17: Appendix
YumChina Appendix
Slide 18: Yum China Key Financials
Yum China Key Financials Q1’20 Q1’21 Q1’22 Q1 YoY Same-store sales growth1 (15)% +10% (8)% / System sales growth1 (20)% +34% (4)% / Total revenue ($bn) 1.75 2.56 2.67 +4% Restaurant margin 10.7% 18.7% 13.8% (4.9)ppts Operating profit (OP) ($mn) 97 342 191 (44)% Adjusted OP ($mn) 98 345 193 (44%) Net
Slide 19: Key Factors of Year-over-year Change
Key Factors of Year-over-year Change 2020 2021 2022 2.56 2.67 342 Total 1.75 Operating 191 Revenue Profit 97 ($bn) ($mn) Q1 Q1 Key factors for Q1 year-over-year growth Key factors for Q1 year-over-year decline + New unit contribution + New unit contribution + Consolidation of Hangzhou KFC + Cost sav
Slide 20: KFC Key Financials
KFC Key Financials Sales Growth (%) Restaurant Margin (%) Operating Profit 2 ($ mn) System sales growth 1 24% 19.9% 15.2% 327 13.6% -4% 220 -15% Q1 Q1 153 Same-store sales growth 1 2022 vs 2021 Q1 5% Same-store sales (9)% - Transactions (14)% - Average ticket +6% Q1 -9% -11% Q1 1 Stated on a constan
Slide 21: Pizza Hut Key Financials
Pizza Hut Key Financials Sales Growth (%) Restaurant Margin (%) Operating Profit 2 ($ mn) System sales growth 1 15.3% 57% 60 10.7% -1% 0.3% 30 -38% Q1 Q1 Same-store sales growth 1 38% 2022 vs 2021 Q1 Same-store sales (5)% - Transactions (3)% (28) -5% - Average ticket (2)% Q1 -31% Q1 1 Stated on a co
Slide 22: Reconciliation of Reported Results to Non-GAAP Measures
Reconciliation of Reported Results to Non-GAAP Measures Quarter Ended 3/31/2022 3/31/2021 Non-GAAP Reconciliations Reconciliation of Operating Profit to Adjusted Operating Profit Operating Profit $ 191 $ 342 Special Items, Operating Profit (2) (3) Adjusted Operating Profit $ 193 $ 345 Details of Spe
Slide 23: Committed to Sustainable Growth
Committed to Sustainable Growth Environmental Social Governance GHG / Energy Efficiency Employee Welfare Board Independence Recognition SBT goal on GHG Upgraded medical insurance • Independent Board Chairman reduction in line with coverage of eligible restaurant 1.5C Committing to managers and their