Third Quarter 2022 Results
2 November 2022
NYSE: YUMC and HKEX: 9987
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 covered by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements generally can be identified by the fact that they do not relate strictly to historical or current facts and by the use of forward-looking words such as "expect," "expectation," "believe," "anticipate," "may," "could," "intend," "belief," "plan," "estimate," "target," "predict," "project," "likely," "will," "continue," "should," "forecast," "commit," "outlook" or similar terminology. These statements are based on current estimates and assumptions made by us in light of our experience and perception of historical trends, current conditions and expected future developments, as well as other factors that we believe are appropriate and reasonable under the circumstances, but there can be no assurance that such estimates and assumptions will prove to be correct. Forward-looking statements include, without limitation, statements regarding the future strategies, growth, business plans, investment, dividend and share repurchase plans, liquidity, earnings, performance and returns of Yum China, anticipated effects of population and macroeconomic trends, the expected impact of the COVID-19 pandemic, the anticipated effects of our innovation, digital and delivery capabilities and investments on growth and beliefs regarding the long-term drivers of Yum China's business. Forward-looking statements are not guarantees of performance and are inherently subject to known and unknown risks and uncertainties that are difficult to predict and could cause our actual results or events to differ materially from those indicated by those statements. We cannot assure you that any of our expectations, estimates or assumptions will be achieved. The forward-looking statements included in this presentation are only made as of the date of this presentation, and we disclaim any obligation to publicly update any forward-looking statement to reflect subsequent events or circumstances, except as required by law. Numerous factors could cause our actual results or events to differ materially from those expressed or implied by forward-looking statements, including, without limitation: whether we are able to achieve development goals at the times and in the amounts currently anticipated, if at all, the success of our marketing campaigns and product innovation, our ability to maintain food safety and quality control systems, the changes in public health conditions, including the COVID-19 pandemic and regional outbreaks caused by existing or new COVID-19 variants, our ability to control costs and expenses, including tax costs, as well as changes in political, economic and regulatory conditions in China. In addition, other risks and uncertainties not presently known to us or that we currently believe to be immaterial could affect the accuracy of any such forward-looking statements. All forward-looking statements should be evaluated with the understanding of their inherent uncertainty. You should consult our filings with the Securities and Exchange Commission (including the information set forth under the captions "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q) for additional detail about factors that could affect our financial and other results. This presentation includes certain non- GAAP financial measures. Reconciliation of these non-GAAP financial measures to the most directly comparable GAAP measures are included in this presentation where indicated. You are urged to consider carefully the comparable GAAP measures and reconciliations.
2
Delivered Sales and Profit Growth in Q3
Through Strong Execution
Focus on
Resilience
Growth
Moat
Strategic Framework
Q3 | |||
2020 | 2021 | 2022 | |
Total stores | 10,150 | 11,415 | 12,409 |
Gross new stores | 312 | 524 | 403 |
Net new stores | 196 | 392 | 239 |
Revenue | $2.35bn | $2.55bn | $2.68bn |
Operating profit1 | $556mn | $178mn | $316mn |
Adjusted operating profit | $320mn | $168mn | $318mn |
Revenue growth2 | +1% | +9% | +5% |
System sales growth3 | +1% | +1% | +5% |
Same-store sales growth3 | (6)% | (7)% | Flat |
Restaurant margin | 18.6% | 12.2% | 18.8% |
Members | 285 mn+ | 350 mn+ | 400 mn+ |
Off-premise sales4 | 50%+ | 55%+ | 60%+ |
Digital order4 | ~78% | ~87% | ~91% |
1 | 2020 Q3 Operating profit includes a one-timere-measurement gain of $239mn in connection with the consolidation of Suzhou KFC. | |
2 | Stated in reported currency, includes the consolidation of Huang Ji Huang from April 2020, Suzhou KFC from August 2020 and Hangzhou KFC from December 2021. | |
3 | Stated on a constant currency basis | 3 |
4 | % of Company sales |
Capturing Significant Off-premise Demand
DeliveryOff-premise
Pizza Hut Delivery Offer
Buy 2 pizzas for ¥99
% of Company sales1 | Delivery sales growth2 |
~32% | ~37% | |||
~27% | ||||
+19% vs Q3'21 | ||||
Q3 | 2020 | 2021 | 2022 | |
~32% | ~38% | ~41% | ||
+15% vs Q3'21 | ||||
Q3 |
% of Company sales1
~60% | ~65% | |
55%+ | ||
Q3 |
~49% |
~45% |
~40% |
Q3 |
1 | % of Company sales include Suzhou KFC since August 2020 and Hangzhou KFC since December 2021 | 4 |
2 | Stated on a constant currency basis. Adjusted KFC delivery sales for 2021 include Hangzhou KFC for a like-for-like comparison with 2022. |
Driving Digital Ordering and Member Sales
Digital Orders | Members1 | Member sales2 | ||
KFC Sold 100mn+ Privilege Subscriptions Since 2018
% of Company sales3
~83% | ~88% | ~90% |
~85% | ~92% |
~65% |
Million | |||
320+ | 370+ | ||
260+ | |||
Q3 2020 | Q3 2021 | Q3 2022 | |
105+ | 125+ | ||
80+ | |||
% of System sales
~61% | ~63% | ~61% |
~62% | ~65% |
~53% |
- Cumulative as of period-end
- From 2022, in addition to transactions in which members self-identified as members (i.e., through member QR code, using member coupons/vouchers, ordering via Super-Apps or other own channels), member sales also include 1) transactions in which members order using our coupons/vouchers through third party e-commerce platforms, 2) Pizza Hut tableside orders paid through POS terminals, provided that members could otherwise be identified as members. 2021 data restated to reflect this change. Before restatement KFC was 62% and PH was 56% in 2021 Q3.
- % of Company sales include Suzhou KFC since August 2020 and Hangzhou KFC since December 2021
5
This is an excerpt of the original content. To continue reading it, access the original document here.
Attachments
- Original Link
- Original Document
- Permalink
Disclaimer
Yum China Holdings Inc. published this content on 01 November 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 01 November 2022 23:09:04 UTC.