Accelerating store network expansion, aiming
for 20,000 stores as the next milestone
Widening strategic moat in digital and supply
chain to enable accelerated growth
Long-term potential for high single to double
digit system sales, operating profit and EPS growth
SHANGHAI, Sept. 22, 2021 /PRNewswire/ -- Yum China
Holdings, Inc. (the "Company" or "Yum China") (NYSE: YUMC and HKEX:
9987) today will host its 2021 virtual investor day. At the event,
Yum China's Chief Executive Officer Joey
Wat and other members of the Yum China management team will
share the Company's drivers of resiliency and strategies for
long-term growth.
Joey Wat commented, "Yum China
has been demonstrating its resiliency and agility during the
pandemic. Our core brands KFC and Pizza Hut responded quickly to
the situation and delivered solid results over the past 18 months.
As we manage risks in the short term, we see plenty of
opportunities to grow quickly. We are accelerating our store
network expansion to reach our 20,000 store milestone. We will
drive growth from our core brands, as well as emerging brands such
as Lavazza, which we aim to grow to 1,000 stores by 2025. We will
widen our strategic moat by investing in digitalization and supply
chain, our key growth enablers. We are committed to and confident
in achieving sustainable long-term growth."
Investor Day Highlights
KFC: Resilient Business with Rapid Store Expansion
KFC's resiliency is reflected in its solid results during the
pandemic. The brand has been relentlessly focusing on good food, an
online and offline seamless customer experience and operational
excellence. As the customer base continues to grow, KFC is
aggressively innovating to include more menu options, such as juicy
whole chicken, beef burgers and fruity tea. The brand is also
driving vigorous growth in off-premise sales and launching packaged
foods to capture the at-home consumption trend. Building on its
vast membership of over 305 million members, KFC is leveraging
digital tools to engage members more effectively. Looking forward,
KFC will continue to expand its store network by utilizing distinct
store models to increase store density in existing cities and
further penetrate into lower tier cities.
Pizza Hut: We are Back!
Pizza Hut's revitalization program has significantly improved
fundamentals and yielded great results in first half 2021 with
system sales and operating profit growth. The brand will focus on
sharpening its 4-pillar strategy to make the business more
resilient going forward. Foremost is strengthening its leadership
in the pizza and steak categories with great value for money.
Second, driving sales via multiple channels, including not just
dine-in and delivery, but also takeaway and packaged foods. Third,
improving the digital experience for customers while broadening its
member base. Finally, accelerating new store openings by focusing
on smaller store formats such as the satellite model, which has
proven successful and is delivering a healthy payback period of
approximately 2 to 3 years.
Make Coffee a Meaningful Part of Yum China
Rapid same-store sales growth at COFFii & JOY and the early
success of Lavazza reaffirm the Company's belief in the potential
of the coffee market in China.
COFFii & JOY is positioned to attract younger consumers with
its artisanal coffee and small store format. Lavazza offers a
premium and authentic Italian coffee experience. Yum China and the
Lavazza Group, the world-renowned family-owned Italian coffee
company, will accelerate the expansion of the store network in
China through their joint venture,
targeting to open 1,000 Lavazza stores by 2025. The joint venture
is also expected to be Lavazza's exclusive distributor in mainland
China to introduce more products
from Lavazza's portfolio.
Digitally Transforming Store Operations
Digital and technology initiatives have been supporting business
growth. Our digitalization along with automation, the Internet of
Things and artificial intelligence (AI) work together to enhance
food safety, replace manual work and improve overall store
efficiency. The "Super Brain," an end-to-end AI-enabled system,
integrates data from store operations and aids the decision making
of restaurant general managers. Yum China will continue to invest
in digital to drive operational excellence and create a seamless
experience for customers.
Next Generation Supply Chain
Yum China's proprietary and world-class supply chain is one of
its key growth enablers. The network of 33 logistics centers and
consolidation centers deliver to stores across more than 1,500
cities and is ready to support further expansion. Yum China is
actively using automation and intelligent technologies to make
step-change improvements in supply chain traceability and
productivity. To keep pace with business needs, Yum China has
earmarked $1 billion of investment
over the next five years for: 1) expanding the logistics network to
45 to 50 logistics centers and consolidation centers, 2) supply
chain digitalization, and 3) sustainability initiatives.
Capital Allocation Plan
The Company plans to increase capital expenditures to
approximately $5 billion to
$6.5 billion in the aggregate over
the next five years to support organic growth. Most of the capital
expenditures will be allocated to accelerate growth in our core
brands, remodel stores, scale up our emerging brands and enhance
supply chain and digital infrastructure.
Long Term Potential
Over the long term, Yum China sees the potential to achieve high
single-digit to double-digit percentage system sales growth,
operating profit growth and earnings per share growth, all measured
before foreign exchange impact and special items.
Webcast and Presentation Materials
A webcast of the virtual Investor Day as well as the
presentation materials will be available at https://2021investorday.yumchina.com.
Forward-Looking Statements
This press release 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," "aim," "plan," "estimate," "target," "predict,"
"project," "likely," "will," "continue," "should," "forecast,"
"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,
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 press release are only made as of the
date of this press release, 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, 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.
About Yum China Holdings, Inc.
Yum China Holdings, Inc. is a licensee of Yum! Brands in
mainland China. It has exclusive
rights in mainland China to KFC,
China's leading quick-service
restaurant brand, Pizza Hut, the leading casual dining restaurant
brand in China, and Taco Bell, a
California-based restaurant chain
serving innovative Mexican-inspired food. Yum China also owns the
Little Sheep, Huang Ji Huang, East
Dawning and COFFii & JOY concepts outright. In addition, Yum
China has partnered with Lavazza to explore and develop the Lavazza
coffee shop concept in China. The
Company had 11,023 restaurants in over 1,500 cities at
the end of June 2021. Yum
China ranked # 363 on the Fortune 500 list and was named to
TIME100 Most Influential Companies list in 2021. Yum China has been
named the Industry Leader for the Restaurant & Leisure
Facilities Industry in the 2020 Dow Jones Sustainability Indices.
In 2021, Yum China was named to the Bloomberg Gender-Equality Index
and was certified as a Top Employer 2021 in China by the Top Employers Institute, both for
the third consecutive year. For more information, please visit
http://ir.yumchina.com.
Investor Relations Contact:
Tel: +86 21 2407 7556
IR@YumChina.com
Media Contact:
Tel: +86 21 2407 7510
Media@YumChina.com
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SOURCE Yum China Holdings, Inc.