Yum China Holdings, Inc. · NYSE:YUMC
Yum China — Q4 2024 Earnings Presentation
40 slides from Yum China's earnings presentation, Feb 6, 2025
Slide 1: Fourth Quarter and Fiscal Year 2024 Results
Fourth Quarter and Fiscal Year 2024 Results 6 February 2025 NYSE: YUMC and HKEX: 9987
Slide 2: Cautionary Statement
Cautionary Statement 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 provisions of the Private Sec
Slide 3: Improved Same-store Sales Index and Strong Profit Growth in Q4
Improved Same-store Sales Index and Strong Profit Growth in Q4 Sales Improvement Margin Expansion Strong Profit Growth System sales Same-store OP Restaurant Operating Core Operating growth1 sales index1 Margin Margin Profit Profit4 +4% 99% 5.8% 12.3% +36% +35% YoY Of 2023 level YoY YoY Outpaced Chin
Slide 4: Quarterly Improvement Throughout 2024
Quarterly Improvement Throughout 2024 Same-store sales index Operating profit growth +36%+35% 2024 as % of 2023 level 99 2024 vs 2023 +12% +15%+18% 97 97 +1% +4% 96 1 (10)% OP growth Core OP growth Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 OP margin Restaurant margin 2024 vs 2023 2024 vs 2023 +140 +140 +140 +160 +180
Slide 5: Topline and Bottomline Set New Records in 2024
Topline and Bottomline Set New Records in 2024 Dual Focus on Growth and Capital Returns $11.3 bn $1.2 bn $1.5 bn Record Capital Record Revenue Operating Profit Returns to Shareholders System sales Same-store OP Record Cash Share growth sales index Margin Adjusted OP Dividends Repurchases +5% 97% 10.
Slide 6: Rapid and High-Quality Footprint Expansion
Rapid and High-Quality Footprint Expansion Total Stores 16,395 1,751 net new stores in 2024 4 years Payback period of company-owned new stores1 >10,000 ~2 years 2-3 years 8 years % of franchise – net new stores 30% 10% >5,000 % of franchise – total stores 13% 5% 25 years To gradually increase the fr
Slide 7: Expanding Our Reach to Capture Significant Growth Opportunities
Expanding Our Reach to Capture Significant Growth Opportunities Total Net New Penetrate more locations 2024 FY with flexible models 2025 Targets: Stores Stores Total 11,648 1,352 % in Tier 3-6 56% 55% 2,200+ ~800 1,600-1,800 Cities with Cities without Average capex per new store1: ~RMB 1.5mn KFC KFC
Slide 8: Achieved Double-Digit Delivery Sales Growth
Achieved Double-Digit Delivery Sales Growth Delivery • Sales grew 14% YoY in Q4 and full year ~34% ~31% • Gained market share on delivery ~53% ~51% ~54% platforms ~70% Takeaway ~29% ~30% ~9% ~10% • KFC: ratio remains relatively stable ~28% ~5% • Pizza Hut: ratio doubled from 2019 to ~36% ~40% ~37% ~
Slide 9: KFC Delivered Strong Performance
KFC Delivered Strong Performance +6% 1,352 14.0% $1,192mn System sales Net new stores OP margin Operating profit growth FULL ` YEAR 2024 98% 11,648 16.9% (1)% +6% Same-store Total stores Restaurant margin OP growth Core OP sales index growth Photo: KFC Basketball theme store in Suzhou Olympic Sports
Slide 10: Q4 Operating Profit Improved Significantly
Q4 Operating Profit Improved Significantly +5% YoY 99% +3% same-store transaction growth (8 consecutive quarters of growth) System sales Same-store growth sales index 9.9% 13.3% Q4 OP margin Restaurant margin 2024 +100 bps YoY +130 bps YoY +120 bps YoY on a +160 bps YoY on a comparable basis compara
Slide 11: Breathing Fresh Energy Into Our Flagship Categories
Breathing Fresh Energy Into Our Flagship Categories Caramel egg tart Crispy whole chicken Original Recipe chicken burger Gigantic egg tart 11
Slide 12: Breakthrough KCOFFEE Cafe Rolled Out to ~700 Locations
Breakthrough KCOFFEE Cafe Rolled Out to ~700 Locations Note: KCOFFEE Cafes are considered part of existing KFC stores and are not counted separately in Yum China's total store count. 12
Slide 13: Bringing Back Crayfish and Golden Bucket in CNY
Bringing Back Crayfish and Golden Bucket in CNY Golden bucket Spicy crayfish beef wrap 13
Slide 14: Pizza Hut Has Achieved Significant Progress
Pizza Hut Has Achieved Significant Progress +2% 412 6.8% $153mn System sales Net new stores OP margin Operating profit growth +50bps YoY FULL +90bps YoY on a YEAR comparable basis 2024 95% 3,724 12.0% +7% +19% Same-store Total stores Restaurant margin OP growth Core OP growth sales index +20bps YoY
Slide 15: Operating Profit Doubled in Q4
Operating Profit Doubled in Q4 +3% YoY 98% +9% same-store transaction growth (8 consecutive System sales Same-store quarters of growth) growth sales index 2.6% 9.3% Q4 OP margin Restaurant margin 2024 +160 bps YoY +200 bps YoY +170 bps YoY on a +220 bps YoY on a comparable basis comparable basis +15
Slide 16: Broadening Addressable Market by Widening Price Range and Enhancing Menu
Broadening Addressable Market by Widening Price Range and Enhancing Menu Entry-Price Pizzas Pizza Dough Burgers Potato wedges & bacon Italian Bolognese Texas barbecue chicken Sales of pizzas priced under RMB50 +50% year-over-year 17mn burgers sold since launch! 16
Slide 17: Pizza Hut WOW Surpassed 200 Stores
Pizza Hut WOW Surpassed 200 Stores 17
Slide 18: New Menu: Exciting New Products and Amazing Value
New Menu: Exciting New Products and Amazing Value 40 • Lower prices on iconic products while protecting margins • More straight-forward value-for-money communication Delicious new products 18
Slide 19: Introducing Delicious and Festive Food
Introducing Delicious and Festive Food Fortune cat Golden salty egg pistachio stuffed chicken pizza crust pizza 19
Slide 20: Emerging Brands Made Meaningful Progress in 2024
Emerging Brands Made Meaningful Progress in 2024 Dual growth engines – coffee shops and retail 55 net new stores Meaningfully improved store economics Profitable for 5 consecutive years Retail sales +30% YoY since acquisition 112 stores 686 stores Refining business model and store 20 net new stores
Slide 21: Significant Capital Returns to Shareholders
Significant Capital Returns to Shareholders Capital returns to shareholders in 2017-20241 Target capital returns2 $4.5bn since spin-off $4.5bn $3bn In $mn 1,490 in 2024-26 in 2025-26 1 Increase in Quarterly Cash Dividends 668 833 $0.16 $0.24 +50% 473 442 Q1 2024 Q1 2025 278 166 102 2 Share Repurchas
Slide 22: Proactive Measures have Led to Favorable Results and Positioned Us for Future Success
Proactive Measures have Led to Favorable Results and Positioned Us for Future Success Pursue greater operational efficiency by taking the perspectives of: RGM’s point of view Customer’s point of view Reduce business Simplify menu & Centralize, automate, complexity operations redesign key processes B
Slide 23: Appendix
Appendix 23
Slide 24: Fourth Quarter Grew YoY and vs 2019
Fourth Quarter Grew YoY and vs 2019 Fourth Quarter 2019 2023 2024 2024 vs 2023 2024 vs 2019 No. of Stores 9,200 14,644 16,395 +12% +78% Total Revenues ($ mn) 2,029 2,493 2,595 +4% +28% Members (mn) 240+ 470+ 525+ +11% +119% Member Sales % 56% 65% 64% (1) ppt ~ +8ppt Operating Profit ($ mm) 94 110 15
Slide 25: Full Year Grew YoY and vs 2019
Full Year Grew YoY and vs 2019 Full Year 2019 2023 2024 2024 vs 2023 2024 vs 2019 No. of Stores 9,200 14,644 16,395 +12% +78% Total Revenues ($ mn) 8,776 10,978 11,303 +3% +29% Members (mn) 240+ 470+ 525+ +11% +119% Member Sales % 52% 65% 65% On par ~ +13ppt Operating Profit ($ mm) 901 1,106 1,162 +
Slide 26: Sales and Profit Grew YoY in Fourth Quarter
Sales and Profit Grew YoY in Fourth Quarter Revenue/Sales YoY Total Revenue ($bn) 2.49 2.60 Key factors for Revenue year-over-year change Revenue growth (reported) +4% + Net new unit contribution − Same-store sales decline Revenue growth (ex F/X) +4% System sales growth +4% 23'Q4 24'Q4 Operating Pro
Slide 27: Fourth Quarter Key Performance Highlights – KFC & Pizza Hut
Fourth Quarter Key Performance Highlights – KFC & Pizza Hut Digital 24’Q4 YoY Sales Growth Channel Mix Members order System Same-store Same-store Average Total off- Member Sales sales transactions ticket Delivery Million Sales % premise sales % YoY YoY YoY YoY +5% (1)% +3% (4)% 42% 71% ~490 66% 91%
Slide 28: Digital Sales Reached $9.6 Billion in 2024
Digital Sales Reached $9.6 Billion in 2024 Total Members Surpassed 525 Million Digital Sales Growth Member Growth Digital orders1 Members (mn)3 Member sales %4 65% 65% 89% 89% 90% 63% 62% 86% 60% 80% 525+ 52% 470+ $9.6bn 410+ 55% 360+ 300+ Digital Sales2 240+ 2024 FY 2019 2020 2021 2022 2023 2024 20
Slide 29: ESG Key Initiatives
ESG Key Initiatives Food Environment People Community Food Safety as Top Priority Climate Action “People First” Philosophy Rural Revitalization End-to-end food safety and Committed to greenhouse Provide comprehensive One Yuan Donation - 17 quality management system gas emission reduction (first supp
Slide 30: ESG Ratings and Awards
ESG Ratings and Awards Industry No. 1 on DJSI for the 5th Year “Top Employer” for the 7th Year, #2 in China #1 Globally for the Restaurant & Named as “China Top Leisure Facilities Industry in the S&P Employer" by the Top Global 2024 Corporate Employers Institute Sustainability Assessment #1 for the
Slide 31: YUM China's Distinct Competitive Advantages
YUM China’s Distinct Competitive Advantages Resiliency Tremendous Significant and growth capital returns profitability potential to shareholders Outperformed the Target 20,000 stores Target to return industry in good by 2026 ~$4.5bn in times and bad 2024-20261 Commitment to Building Long-lasting Exc
Slide 32: Reconciliation of Reported Results to Non-GAAP Measures
Reconciliation of Reported Results to Non-GAAP Measures (in $mn) Quarter Ended Year Ended 12/31/2024 12/31/2023 12/31/2024 12/31/2023 Non-GAAP Reconciliation Reconciliation of Operating Profit to Adjusted Operating Profit Operating Profit $ 151 $ 110 $ 1,162 $ 1,106 Special Items, Operating Profit —
Slide 33: Reconciliation of Operating Profit to Core Operating Profit
Reconciliation of Operating Profit to Core Operating Profit* (in $mn) Yum China Quarter ended % Change Year Ended % Change 12/31/2024 12/31/2023 B/(W) 12/31/2024 12/31/2023 B/(W) Operating Profit $ 151 $ 110 36 $ 1,162 $ 1,106 5 Special Items, Operating Profit — 6 — 15 Adjusted Operating Profit $ 15
Slide 34: Reconciliation of Operating Profit to Core Operating Profit (KFC)
Reconciliation of Operating Profit to Core Operating Profit (in $mn) Quarter Ended Year Ended KFC 12/31/2024 12/31/2023 12/31/2024 12/31/2023 GAAP Operating Profit $ 192 $ 167 $ 1,192 $ 1,202 Special Items, Operating Profit — — — — Adjusted Operating Profit $ 192 $ 167 $ 1,192 $ 1,202 Items Affectin
Slide 35: Reconciliation of Operating Profit to Core Operating Profit (Pizza Hut)
Reconciliation of Operating Profit to Core Operating Profit (in $mn) Quarter Ended Year Ended Pizza H ut 12/31/2024 12/31/2023 12/31/2024 12/31/2023 GAAP Operating Profit $ 14 $ 5 $ 153 $ 142 Special Items, Operating Profit — — — — Adjusted Operating Profit $ 14 $ 5 $ 153 $ 142 Items Affecting Compa
Slide 36: Reconciliation of Operating Profit to Restaurant Profit
Reconciliation of Operating Profit to Restaurant Profit (in $mn) Yum China Quarter Ended Year Ended 12/31/2024 12/31/2023 12/31/2024 12/31/2023 GAAP Operating Profit $ 151 $ 110 $ 1,162 $ 1,106 Less: Franchise fees and income 22 20 94 89 Revenues from transactions with franchisees 101 90 420 372 Oth
Slide 37: Reconciliation of Operating Profit to Restaurant Profit (KFC)
Reconciliation of Operating Profit to Restaurant Profit (in $mn) KFC Quarter Ended Year Ended 12/31/2024 12/31/2023 12/31/2024 12/31/2023 GAAP Operating Profit $ 192 $ 167 $ 1,192 $ 1,202 Less: Franchise fees and income 16 14 69 62 Revenues from transactions with franchisees 14 12 55 45 Other revenu
Slide 38: Reconciliation of Operating Profit to Restaurant Profit (Pizza Hut)
Reconciliation of Operating Profit to Restaurant Profit (in $mn) Pizza H ut Quarter Ended Year Ended 12/31/2024 12/31/2023 12/31/2024 12/31/2023 GAAP Operating Profit $ 14 $ 5 $ 153 $ 142 Less: Franchise fees and income 2 1 8 7 Revenues from transactions with franchisees 1 1 5 4 Other revenues 7 8 2
Slide 39: Items Affecting Comparability – 2023 by Quarter
Items Affecting Comparability – 2023 by Quarter (in $mn) Yum China 23Q1 23Q2 23Q3 23Q4 Items Affecting Comparability Temporary relief from landlords (8) (2) — (1) Temporary relief from government agencies (2) (1) (1) (3) VAT deductions (19) (9) (14) (2) Amortization of reacquired franchise rights 2
Slide 40: About Yum China
About Yum China Largest restaurant Fortune 500 16,000+ 2,200+ company in China1 company restaurants cities in China 6 restaurant brands Vision: To be the world’s most innovative pioneer in the restaurant industry Company website: http://ir.yumchina.com Investor Relations Contact: IR@YumChina.com Tel