Yum China Holdings, Inc. · NYSE:YUMC
Yum China — Investor Day (2017)
31 slides from Yum China's investor day presentation, 2017
Slide 1: Joey Wat, President & Chief Operating Officer, Yum China
Joey Wat | President & Chief Operating Officer, Yum China
Slide 2: Cautionary Language Regarding Forward-Looking Statements
Cautionary Language Regarding 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 stateme
Slide 3: Digital
\ oes Digital
Slide 4: Building a digital ecosystem across all points of the consumer journey
Building a digital ecosystem across all points of the consumer journey Before Store In Store Efficiency and Reach Enhanced Experience • Mobile pre-order • Diversified ordering options • Virtual store geo- Key Enablers • Digital menu boards targeting • Pick-up 1. Membership • Payment Program • Entert
Slide 5: KFC offers a complete digital consumer journey today
KFC offers a complete digital consumer journey today Before Store Pre-Orders In Store Payment After Gifting Entertain Virtual stores Mobile Digital ordering Mobile Store E-gifting Card Wi-Fi / K-music Payment Membership 5,300+ virtual Pre-order Kiosks and 45% of 97MM+ 4,000+ First month stores From
Slide 6: Pre-orders increase consumer convenience and transaction efficiency
Pre-orders increase consumer convenience and transaction efficiency Easy to order Multiple occasions 6
Slide 7: In-store digitization improves efficiencies and reinforces young and trendy image
In-store digitization improves efficiencies and reinforces young and trendy image Kiosk ordering Pick-up board Digital menu board Mobile ordering Mobile payment K-music In-store WiFi 7 7
Slide 8: China is the world leader in mobile payment; YUMC is one of the leaders
China is the world leader in mobile payment YUMC is one of the leaders in China Mobile & other cashless payments as % of company sales Payment Channels 70% $1.2bn in cashless payments in 3Q 60% Other Cashless 50% Payment ~15% 40% 30% 20% Mobile Payment 10% >45% 0% 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17
Slide 9: KPRO – A full digital experience
KPRO – A full digital experience KPRO Make 100% digital ordering experience possible 9
Slide 10: Further digital evolution to enable ordering across multiple party sizes and occasions
Further digital evolution to enable ordering across multiple party sizes and occasions
Slide 11: Membership programs are key enabler of the digital experience
Membership programs are key enabler of the digital experience: 120MN members cultivated in two years Launched in Oct 2015 (mn) 120 97 100 80 60 40 20 0 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 Launched in Nov 2015 (mn) 100 80 60 40 30 20 0 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 11
Slide 12: Currently a significant contribution to KFC system sales
Currently a significant contribution to KFC system sales Member sales as % of system sales 40% 35% 33% 30% 25% 20% 15% 10% 5% 0% 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 12
Slide 13: Member exclusive campaigns drive loyalty and frequency
Member exclusive campaigns drive loyalty and frequency 2016 Nov 2017 Feb 2017 Mar 2017 Sept Member Anniversary Spring Rising Day 30th Anniversary 30th Anniversary 13
Slide 14: Customized offers increase consumer engagement…
Customized offers increase consumer engagement… Member’s day Free trial Birthday offering 14
Slide 15: …while segmentation enables multiple brand objectives
…while segmentation enables multiple brand objectives Objectives Brand Brand lovers Champion Enhance Online Brand Image Privilege Heavy users Member Lock Share of Wallet Welcome Frequent users Member Increase Frequency Fans/ Mass consumer Lower Cost of Reach Customer 15
Slide 16: And further segmentation driven by differentiated offers
And further segmentation driven by differentiated offers Welcome Member Privilege Member Brand Champion Pilot Data Interaction K- Brand Product Driven via K-gold Lifestyle Champion Launch Coupon KFC rewarded me with K-gold, that’s great! I will continue to support KFC! 16
Slide 17: Pizza Hut Super App launched integrating CRM & delivery
Pizza Hut Super App launched integrating CRM & delivery Delivery Mobile self- ordering Launched on 1st July Next version: November 17
Slide 18: First steps in digital vision
First steps in digital vision Pioneering our digital vision Leveraging KFC experience 18
Slide 19: Delivery
Delivery 19
Slide 20: KFC and Pizza Hut are the #1 delivery brands in their respective categories
KFC and Pizza Hut are the #1 delivery brands in their respective categories with key value differentiators No.1 single brand No.1 pizza delivery platform delivery brand Food Service Network • Curated delivery menu • Speed, satisfaction, and • 5,100+ delivery units* • Specific packaging for engagemen
Slide 21: Aiming to delight customers throughout the whole delivery experience
Aiming to delight customers throughout the whole delivery experience I know I love I can order it Easy Professional Innovative Unique delivery Fun and abundant anywhere anytime to order packaging products brands value to me 21
Slide 22: Delivery network expansion has been the key driver of growth
Delivery network expansion has been the key driver of growth Number of stores offering delivery >5100 2008 2009 2010 2011 2012 2013 2014 2015 2016 3Q17 22
Slide 23: Own riders are key to maintaining quality, service and control
Own riders are key to maintaining quality, service and control while leveraging aggregator traffic KFC delivery business model Pizza Hut delivery business model Own rider Own Platform Consumers KFC stores Own Platform Consumers Aggregators Aggregators KFC rider 3rd-party rider >3,000 delivery stores
Slide 24: Quality, service and network sustain sales growth
Quality, service and network sustain sales growth Delivery as % of company sales Delivery sales growth 16% (Rmb mn) 14% 14% 2,500 2016 2017 12% 2,000 10% 1,500 8% 6% 1,000 4% 500 2% 0% - 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 1Q 2Q 3Q 4Q 24
Slide 25: Future delivery growth will be driven through four initiatives
Future delivery growth will be driven through four initiatives Campaign Digital Daypart Network Innovation Innovation Innovation Expansion 25
Slide 26: Social Bucket to make young consumers "WOW"
Campaign Digital Daypart Channel Innovation Innovation Innovation Expansion Social Bucket to make young consumers “WOW” 26
Slide 27: Signature Smart Value
Campaign Digital Daypart Channel Innovation Innovation Innovation Expansion Signature Smart Value driving sales during off peak periods and dayparts Everyday One Yuan Joint promotions 27
Slide 28: Targeted promotions backed by enhanced IT system
Campaign Digital Daypart Channel Innovation Innovation Innovation Expansion Targeted promotions backed by enhanced IT system Leverage membership program Enhance IT system Consumer Delivery system Store Rider 28
Slide 29: Targeted daypart promotions to build delivery awareness
Campaign Digital Daypart Channel Innovation Innovation Innovation Expansion Targeted daypart promotions to build delivery awareness Breakfast Afternoon Tea Coffee Special Occasion 29
Slide 30: KFC offering in-train delivery at >20 stations across China
Campaign Digital Daypart Channel Innovation Innovation Innovation Expansion KFC offering in-train delivery at >20 stations across China • Station expansion (>20 stations currently) • Enhance operational efficiency • New consumer-friendly package • Optimizing menu according to consumer preferences 30
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