Exhibit 99.1

Yum China Reports Fourth Quarter and Full Year 2020 Results

 

Fourth Quarter Total Revenues grew 11%. System Sales grew 5% in constant currency

Fourth Quarter Operating Profit grew to $180 million

Opened 1,165 new stores in 2020

 

Shanghai, China (February 3, 2021) – Yum China Holdings, Inc. (the "Company" or "Yum China") (NYSE: YUMC and HKEX: 9987) today reported unaudited results for the fourth quarter and year ended December 31, 2020.

 

Impact of COVID-19 Outbreak and Mitigation Efforts  

Fourth quarter operations improved sequentially from the third quarter. The Company’s primary focus continues to be safety, efficiency and sales recovery. To counter the pandemic impact, we ran strong value and digital campaigns to drive traffic. Delivery and takeaway remained popular, while dine-in recovered sequentially. Proactive cost structure realignment, productivity improvements and one-off cost savings helped us achieve year-over-year expansion of restaurant margins and operating profit. However, the pace of recovery was uneven and non-linear, impacted by regional resurgences of COVID-19 in Qingdao, Xinjiang, Beijing, Dalian and elsewhere. October sales benefited from the National Day long holiday, but November and December sales were pressured by the regional outbreaks. Traffic at transportation hubs remained significantly below the prior year due to reduced travel.

 

The impact of regional resurgences has continued into the first quarter of 2021. In January, there were clusters of outbreaks, mostly in northern and northeastern China, resulting in tighter public health measures across China. There are now measures restricting travel and large gatherings, and recommendations against dining out. Several cities have been put on city-wide quarantine, including Shijiazhuang which has an 11-million population and is the capital city of Hebei province.

 

The Company anticipates significant headwinds in the first quarter. Our transportation and tourist locations, representing high single digits of sales mix, will likely be more significantly impacted. In the first few days of the Chinese New Year travel season, which started in late January, the number of travelers declined over 70% year-over-year. The important Chinese New Year holiday season will be subdued, with sales impacted by substantially less travel, smaller gatherings and generally reduced social activities. Our teams are closely monitoring this fluid situation and adjusting marketing programs and operations accordingly. Please also note that in 2020, COVID-related lockdowns started in late January, so they only impacted the last two months of that quarter. January 2020 sales were strong leading into Chinese New Year.

 

Fourth Quarter Highlights

 

Total revenues increased 11% year over year to $2.26 billion from $2.03 billion (a 5% increase excluding foreign currency translation (“F/X”)).

 

Total system sales increased 5% year over year, with an increase of 3% at KFC and a decline of 3% at Pizza Hut, excluding F/X.

 

Same-store sales declined 4% year over year, with declines of 4% at KFC and 5% at Pizza Hut, excluding F/X.

 

Opened 505 new stores during the quarter.

 

Restaurant margin was 15.1%, compared with 12.4% in the prior year period.

 

Operating Profit increased 90% year over year to $180 million from $94 million (a 78% increase excluding F/X).

 

 

Adjusted Operating Profit increased 72% year over year to $182 million from $105 million (a 61% increase excluding F/X).

 

 

Effective tax rate was 28.0%.

 

Net Income increased 68% to $151 million from $90 million in the prior year period, primarily due to the increase in Operating Profit.

 

 

Adjusted Net Income increased 56% to $153 million from $98 million in the prior year period (a 76% increase excluding the $23 million and $24 million net gains in the fourth quarter of 2020 and 2019, respectively, from our equity investment in Meituan Dianping (“Meituan”); a 65% increase if further excluding F/X).

 

 

Yum China Holdings, Inc. •  Shanghai, China •  Website http://ir.yumchina.com

 


 

 

Diluted EPS increased 52% to $0.35 from $0.23 in the prior year period.

 

Adjusted Diluted EPS increased 40% to $0.35 from $0.25 in the prior year period (a 58% increase excluding the net gains from our equity investment in Meituan in 2020 and 2019; a 47% increase if further excluding F/X).

 

Full Year Highlights

There was no material F/X impact on the full year results, and therefore growth rates are based on reported currency, unless otherwise noted.

 

Total revenues declined 6% year over year to $8.26 billion from $8.78 billion.

 

Total system sales declined 5% year over year, with declines of 5% at KFC and 15% at Pizza Hut, excluding F/X.

 

Same-store sales declined 9% year over year, with declines of 8% at KFC and 14% at Pizza Hut, excluding F/X.

 

Opened 1,165 new stores during the year, bringing total store count to 10,506 across more than 1,500 cities.

 

Restaurant margin was 14.9%, compared with 16.0% in the prior year.

 

Operating Profit increased 7% year over year to $961 million from $901 million, primarily due to the re-measurement gain of Suzhou KFC acquisition.

 

Adjusted Operating Profit declined 20% year over year to $732 million from $912 million.

 

Effective tax rate was 26.6%.

 

Net Income increased 10% to $784 million from $713 million in the prior year, primarily due to the increase in Operating Profit.

 

Adjusted Net Income declined 16% to $615 million from $729 million in the prior year (a 19% decline excluding $75 million and $63 million net gains in 2020 and 2019, respectively, from our equity investment in Meituan).

 

Diluted EPS increased 6% to $1.95 from $1.84 in the prior year.

 

Adjusted Diluted EPS declined 19% to $1.53 from $1.88 in the prior year (a 22% decline excluding the net gains from our equity investment in Meituan in 2020 and 2019).

 

Results include the consolidation of Huang Ji Huang since April 2020, and Suzhou KFC since August 2020.

 

Key Financial Results

Fourth Quarter 2020

 

 

 

Full Year 2020

 

 

 

% Change

 

 

 

% Change

 

 

 

System Sales

 

 

Same-Store Sales

 

 

Net New Units

 

 

Operating Profit

 

 

 

System Sales

 

 

Same-Store Sales

 

 

Net New Units

 

 

Operating Profit

 

 

Yum China

 

+5

 

 

 

(4

)

 

 

+14

 

 

 

+90

 

 

 

 

(5

)

 

 

(9

)

 

 

+14

 

 

 

+7

 

 

        KFC

 

+3

 

 

 

(4

)

 

 

+10

 

 

 

+26

 

 

 

 

(5

)

 

 

(8

)

 

 

+10

 

 

 

(16

)

 

        Pizza Hut

 

(3

)

 

 

(5

)

 

 

+3

 

 

NM

 

 

 

 

(15

)

 

 

(14

)

 

 

+3

 

 

 

(45

)

 

 

 

Fourth Quarter

 

 

 

 

Full Year

 

 

(in US$ million, except

 

 

 

 

 

 

 

 

 

 

% Change

 

 

 

 

 

 

 

 

 

 

 

 

 

% Change

 

 

per share data and percentages)

 

2020

 

 

 

2019

 

 

Reported

 

 

Ex F/X

 

 

 

 

2020

 

 

 

2019

 

 

Reported

 

 

Ex F/X

 

 

Operating Profit

$

 

180

 

 

$

 

94

 

 

 

+90

 

 

 

+78

 

 

 

$

 

961

 

 

$

 

901

 

 

 

+7

 

 

 

+7

 

 

Adjusted Operating Profit1

$

 

182

 

 

$

 

105

 

 

 

+72

 

 

 

+61

 

 

 

$

 

732

 

 

$

 

912

 

 

 

(20

)

 

 

(20)

 

 

Net Income

$

 

151

 

 

$

 

90

 

 

 

+68

 

 

 

+59

 

 

 

$

 

784

 

 

$

 

713

 

 

 

+10

 

 

 

+10

 

 

Adjusted Net Income1

$

 

153

 

 

$

 

98

 

 

 

+56

 

 

 

+48

 

 

 

$

 

615

 

 

$

 

729

 

 

 

(16

)

 

 

(15)

 

 

Basic Earnings Per Common Share

$

 

0.36

 

 

$

 

0.24

 

 

 

+50

 

 

 

+42

 

 

 

$

 

2.01

 

 

$

 

1.89

 

 

 

+6

 

 

 

+7

 

 

Adjusted Basic Earnings Per

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Common Share1

$

 

0.37

 

 

$

 

0.26

 

 

 

+42

 

 

 

+35

 

 

 

$

 

1.58

 

 

$

 

1.93

 

 

 

(18

)

 

 

(18)

 

 

Diluted Earnings Per Common Share

$

 

0.35

 

 

$

 

0.23

 

 

 

+52

 

 

 

+43

 

 

 

$

 

1.95

 

 

$

 

1.84

 

 

 

+6

 

 

 

+7

 

 

Adjusted Diluted Earnings Per

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Common Share1

$

 

0.35

 

 

$

 

0.25

 

 

 

+40

 

 

 

+36

 

 

 

$

 

1.53

 

 

$

 

1.88

 

 

 

(19

)

 

 

(18)

 

 

1 See “Reconciliation of Reported GAAP Results to non-GAAP Adjusted Measures” included in the accompanying tables of this release for further details.

Note:  All comparisons are versus the same period a year ago.

NM refers to changes over 100%, from negative to positive amounts or from zero to an amount.

Percentages may not recompute due to rounding.

System sales and same-store sales percentages exclude the impact of F/X. Effective January 1, 2018, temporary store closures are normalized in the same-store sales calculation by excluding the period during which stores are temporarily closed.

 

2


 

CEO and CFO Comments

Joey Wat, CEO of Yum China, commented, “2020 was an unprecedented year that tested our people, systems and capabilities. I would like to express my heartfelt appreciation to our employees and business partners. Through their dedication, creativity, and tireless efforts, we overcame numerous challenges and demonstrated our ability to succeed in the face of adversity. Fourth quarter results marked a strong finish to 2020, with same-store sales recovering sequentially and double-digit operating profit growth. Our foremost priority remains the safety of our employees and customers. The COVID-19 pandemic reinforced our determination to look after our employees and strive to be a responsible corporate citizen, an effort that is recognized by our industry.”

 

Wat continued, “Looking into 2021, we will continue to manage the impact of the pandemic. We will swiftly adjust our operations according to market conditions and drive traffic with compelling offers for both dine-in and off-premise occasions. Our industry-leading digital capabilities enable us to stay agile in this ever-evolving situation. We remain committed to growth and intend to open approximately 1,000 new stores in the year ahead. Our confidence in the long-term potential of China is unshaken. We are focused on growing our store footprint and developing our emerging brands. We will also step up investment in digitization and infrastructure to create an even stronger foundation to accelerate expansion. I am confident that with the strength of our team together with our resilient business model, culture of innovation and execution capabilities, we will overcome these short-term challenges and achieve attractive long-term growth.”  

 

Andy Yeung, CFO of Yum China, added, “Fourth quarter operations improved sequentially, although the recovery was uneven and non-linear, impacted by regional outbreaks. We improved our margins in the quarter with solid productivity gains, temporary relief and one-off savings. Recent surges in COVID-19 outbreaks resulted in the government tightening measures nationwide, including city-wide quarantine in several cities, advice against travel during the Chinese New Year holiday period and large gatherings. These measures resulted in a very challenging condition. Traffic is significantly lower in transportation and tourist locations. Accordingly, we will continue to adjust our operations and leverage our digital and delivery resources to capture dine-in and off-premise demand. We also plan to step up our value campaigns and tailor offers according to city tiers and trade zones. Despite these challenges, we will continue to invest for the long term, focusing on building our capabilities, making our business model more resilient, and driving long-term growth. Our healthy balance sheet and strong cash position enable us to handle potential contingencies, while laying the foundation for us to capture market opportunities and achieve sustainable growth in the long run.”

 

Dividends

 

The Board of Directors declared a cash dividend of $0.12 per share on Yum China’s common stock, payable as of the close of business on March 25, 2021 to shareholders of record as of the close of business on March 3, 2021.

 

Digital and Delivery

 

The KFC and Pizza Hut loyalty programs exceeded 300 million members combined. Member sales increased to approximately 59% of system sales in the fourth quarter 2020, an increase of approximately 3 percentage points from the prior year period.

 

Delivery contributed to approximately 29% of KFC and Pizza Hut’s Company sales in the fourth quarter of 2020, an increase of approximately 7 percentage points from the prior year period.

 

Digital orders, including delivery, mobile orders and kiosk orders, accounted for approximately 83% of KFC and Pizza Hut’s Company sales in the fourth quarter of 2020, an increase of approximately 22 percentage points from the prior year period.

KFC and Pizza Hut Total

 

Fourth Quarter

 

 

Full Year

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

        Member count (as of period-end)

 

300 million+

 

 

240 million+

 

 

300 million+

 

 

240 million+

 

        Member sales as % of system sales

 

~59%

 

 

~56%

 

 

~60%

 

 

~52%

 

        Delivery as % of Company sales

 

~29%

 

 

~22%

 

 

~30%

 

 

~20%

 

        Digital orders as % of Company sales

 

~83%

 

 

~61%

 

 

~80%

 

 

~55%

 

3


 

 

 

New-Unit Development and Asset Upgrade

 

The Company opened 505 new stores in the fourth quarter and 1,165 new stores in the full year 2020, mainly driven by development of the KFC brand.

 

The Company remodeled 297 stores in the fourth quarter and 939 stores in the full year 2020.

 

New Units

 

 

 

Restaurant Count

 

 

 

 

Fourth Quarter

 

Full Year

 

 

 

As of Year-End

 

 

 

 

2020

 

2020

 

 

 

2020

 

 

2019

 

 

Yum China

 

505

 

 

1,165

 

 

 

 

10,506

 

 

 

9,200

 

 

   KFC

 

306

 

840

 

 

 

 

7,166

 

 

 

6,534

 

 

   Pizza Hut

 

96

 

152

 

 

 

 

2,355

 

 

 

2,281

 

 

   Others2

 

103

 

173

 

 

 

 

985

 

 

 

385

 

 

2 Others include Taco Bell, Little Sheep, Huang Ji Huang, East Dawning, COFFii & JOY and Lavazza.

 

Restaurant Margin

 

Restaurant margin was 15.1% in the fourth quarter 2020, compared with 12.4% in the prior year period, primarily attributable to lower commodity prices, relief provided by landlords and government agencies, and other store cost savings, partially offset by pressure from the same-store sales decline and value promotions. In terms of cost of labor, higher productivity largely offset wage inflation, increased rider cost associated with the rise in delivery volume and the impact from lower sales.

 

Restaurant margin was 14.9% in the full year 2020, compared with 16.0% in the prior year, primarily attributable to same-store sales decline, temporary store closures impacted by COVID-19 and value promotions, partially offset by higher productivity and relief provided by landlords and government agencies.

Fourth Quarter

 

 

 

Full Year

 

 

 

 

2020

 

 

2019

 

 

ppts change

 

 

 

2020

 

 

2019

 

 

ppts change

 

 

Yum China

 

 

15.1

%

 

 

12.4

%

 

 

+2.7

 

 

 

 

14.9

%

 

 

16.0

%

 

 

(1.1

)

 

   KFC

 

 

16.8

%

 

 

14.5

%

 

 

+2.3

 

 

 

 

16.3

%

 

 

17.8

%

 

 

(1.5

)

 

   Pizza Hut

 

 

10.4

%

 

 

6.7

%

 

 

+3.7

 

 

 

 

10.5

%

 

 

11.1

%

 

 

(0.6

)

 

 

2021 Outlook

The Company provides the following fiscal year 2021 targets:

 

To open approximately 1,000 new stores (gross)

 

To make capital expenditures of approximately $600 million

 

Other Company Updates

 

Johnson Huang, General Manager of KFC, resumed his role after his medical leave.

 

Yum China has been named the Industry Leader for the Restaurant & Leisure Facilities Industry in the 2020 Dow Jones Sustainability Indices (DJSI). Yum China has also been selected as the member of 2020 DJSI World and DJSI Emerging Markets. This reflects the Company's strong performance across economic, environmental and social dimensions, receiving industry best scores in a number of criteria, including supply chain management, risk & crisis management, brand management, packaging as well as labor practice indicators.

 

The Top Employers Institute has certified Yum China as a Top Employer China for 2021. This is the third year in a row that Yum China has received the award and is a testament to the Company’s long-standing commitment to employee care centered around its “Fair, Care and Pride” principles. The global certification program recognizes leading employers that demonstrate dedication to the betterment of the workplace through excellent HR policies and people practices.

 

Yum China has been named for the third consecutive year in 2021 to the Bloomberg Gender-Equality Index (GEI), which recognizes companies committed to transparency in gender reporting and advancing women's equality. Yum China is the only company from Mainland China included in the latest GEI.

 

Note on Non-GAAP Adjusted Measures

Reported GAAP results include Special Items, which are excluded from non-GAAP adjusted measures. Special Items are not allocated to any segment and therefore only impact reported GAAP results of Yum China. See “Reconciliation of Reported GAAP Results to Non-GAAP Adjusted Measures” within this release.

 


4


 

Conference Call

Yum China’s management will hold an earnings conference call at 7:00 p.m. U.S. Eastern Time on Wednesday, February 3, 2021 (8:00 a.m. Beijing/Hong Kong Time on Thursday, February 4, 2021).  

 

Operator-assisted conference calls are not available at the moment. Please register in advance of the conference through the link provided below. Upon registering, you will be provided with participant dial-in numbers, a passcode and a unique registrant ID.

 

 

Pre-registration Link:

http://apac.directeventreg.com/registration/event/2064799

 

Conference ID:

2064799

 

A live webcast of the call may also be accessed at https://edge.media-server.com/mmc/p/mmubh6w3.

 

A replay of the conference call will be available two hours after the call ends until 8:00 a.m. U.S. Eastern Time on Thursday, February 11, 2021 (9:00 p.m. Beijing/Hong Kong Time on Thursday, February 11, 2021) and may be accessed by phone at the following numbers:

 

 

U.S.:

1 855 452 5696

 

Mainland China:

400 602 2065 or 800 870 0206

 

Hong Kong:

+852 3051 2780

 

U.K.:

0808 234 0072

 

International:

+61 2 8199 0299

 

 

Replay access code:

2064799

 

Additionally, this earnings release, the accompanying slides, a live webcast and an archived webcast of this conference call will be available at Yum China’s Investor Relations website at http://ir.yumchina.com.

 

For important news and information regarding Yum China, including our filings with the U.S. Securities and Exchange Commission and the Hong Kong Stock Exchange, visit Yum China's Investor Relations website at http://ir.yumchina.com. Yum China uses this website as a primary channel for disclosing key information to its investors, some of which may contain material and previously non-public information.

 

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, including under “2021 Outlook.” 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,” “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, 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 outbreak, the anticipated effects of our innovation, digital and delivery capabilities 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 outbreak, 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

5


 

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 10,506 restaurants in over 1,500 cities at the end of December 2020. Yum China ranked # 361 on the Fortune 500 list for 2020. 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 / +852 2267 5801

IR@YumChina.com  

 

 

 

  

Media Contact:

 

 

Tel: +86 21 2407 7510

Media@YumChina.com

6


 

 

Yum China Holdings, Inc.

Condensed Consolidated Statements of Income

(in US$ million, except per share data)

(unaudited)

 

 

Quarter Ended

 

 

% Change

 

Year Ended

 

 

% Change

 

 

 

12/31/2020

 

 

12/31/2019

 

 

B/(W)

 

12/31/2020

 

 

12/31/2019

 

 

B/(W)

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Company sales

 

$

2,038

 

 

$

1,813

 

 

 

12

 

 

 

$

7,396

 

 

$

7,925

 

 

 

(7

)

 

 

Franchise fees and income

 

 

36

 

 

 

35

 

 

 

4

 

 

 

 

148

 

 

 

148

 

 

 

 

 

 

Revenues from transactions with

   franchisees and unconsolidated affiliates

 

 

159

 

 

 

158

 

 

 

 

 

 

 

647

 

 

 

654

 

 

 

(1

)

 

 

Other revenues

 

 

26

 

 

 

23

 

 

 

11

 

 

 

 

72

 

 

 

49

 

 

 

45

 

 

 

Total revenues

 

 

2,259

 

 

 

2,029

 

 

 

11

 

 

 

 

8,263

 

 

 

8,776

 

 

 

(6

)

 

 

Costs and Expenses, Net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Company restaurants

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Food and paper

 

 

631

 

 

 

583

 

 

 

(8

)

 

 

 

2,342

 

 

 

2,479

 

 

 

6

 

 

 

Payroll and employee benefits

 

 

494

 

 

 

436

 

 

 

(13

)

 

 

 

1,730

 

 

 

1,807

 

 

 

4

 

 

 

Occupancy and other operating expenses

 

 

605

 

 

 

569

 

 

 

(6

)

 

 

 

2,226

 

 

 

2,373

 

 

 

6

 

 

 

Company restaurant expenses

 

 

1,730

 

 

 

1,588

 

 

 

(9

)

 

 

 

6,298

 

 

 

6,659

 

 

 

5

 

 

 

General and administrative expenses

 

 

140

 

 

 

147

 

 

 

4

 

 

 

 

479

 

 

 

487

 

 

 

2

 

 

 

Franchise expenses

 

 

15

 

 

 

16

 

 

 

7

 

 

 

 

65

 

 

 

71

 

 

 

8

 

 

 

Expenses for transactions with

   franchisees and unconsolidated affiliates

 

 

153

 

 

 

157

 

 

 

3

 

 

 

 

633

 

 

 

645

 

 

 

2

 

 

 

Other operating costs and expenses

 

 

19

 

 

 

17

 

 

 

(13

)

 

 

 

57

 

 

 

37

 

 

 

(53

)

 

 

Closures and impairment expenses, net

 

 

25

 

 

 

22

 

 

 

(10

)

 

 

 

55

 

 

 

36

 

 

 

(51

)

 

 

Other income, net

 

 

(3

)

 

 

(12

)

 

 

(73

)

 

 

 

(285

)

 

 

(60

)

 

NM

 

 

 

Total costs and expenses, net

 

 

2,079

 

 

 

1,935

 

 

 

(7

)

 

 

 

7,302

 

 

 

7,875

 

 

 

7

 

 

 

Operating Profit

 

 

180

 

 

 

94

 

 

 

90

 

 

 

 

961

 

 

 

901

 

 

 

7

 

 

 

Interest income, net

 

 

15

 

 

 

10

 

 

 

60

 

 

 

 

43

 

 

 

39

 

 

 

11

 

 

 

Investment gain

 

 

29

 

 

 

24

 

 

 

19

 

 

 

 

104

 

 

 

63

 

 

 

65

 

 

 

Income Before Income Taxes

 

 

224

 

 

 

128

 

 

 

74

 

 

 

 

1,108

 

 

 

1,003

 

 

 

10

 

 

 

Income tax provision

 

 

(63

)

 

 

(34

)

 

 

(82

)

 

 

 

(295

)

 

 

(260

)

 

 

(13

)

 

 

Net income – including noncontrolling interests

 

 

161

 

 

 

94

 

 

 

72

 

 

 

 

813

 

 

 

743

 

 

 

9

 

 

 

Net income – noncontrolling interests

 

 

10

 

 

 

4

 

 

NM

 

 

 

 

29

 

 

 

30

 

 

 

3

 

 

 

Net Income – Yum China Holdings, Inc.

 

$

151

 

 

$

90

 

 

 

68

 

 

 

$

784

 

 

$

713

 

 

 

10

 

 

 

Effective tax rate

 

 

28.0

%

 

 

26.8

%

 

 

(1.2

)

ppts.

 

 

26.6

%

 

 

25.9

%

 

 

(0.7

)

ppts.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic Earnings Per Common Share

 

$

0.36

 

 

$

0.24

 

 

 

 

 

 

 

$

2.01

 

 

$

1.89

 

 

 

 

 

 

 

Weighted-average shares outstanding

    (in millions)

 

 

420

 

 

 

376

 

 

 

 

 

 

 

 

390

 

 

 

377

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted Earnings Per Common Share

 

$

0.35

 

 

$

0.23

 

 

 

 

 

 

 

$

1.95

 

 

$

1.84

 

 

 

 

 

 

 

Weighted-average shares outstanding

    (in millions)

 

 

433

 

 

 

387

 

 

 

 

 

 

 

 

402

 

 

 

388

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash Dividends Declared Per Common Share

 

$

0.12

 

 

$

0.12

 

 

 

 

 

 

 

$

0.24

 

 

$

0.48

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Company sales

 

 

100.0

%

 

 

100.0

%

 

 

 

 

 

 

 

100.0

%

 

 

100.0

%

 

 

 

 

 

 

Food and paper

 

 

31.0

 

 

 

32.2

 

 

 

1.2

 

ppts.

 

 

31.7

 

 

 

31.3

 

 

 

(0.4

)

ppts.

 

Payroll and employee benefits

 

 

24.2

 

 

 

24.0

 

 

 

(0.2

)

ppts.

 

 

23.4

 

 

 

22.8

 

 

 

(0.6

)

ppts.

 

Occupancy and other operating expenses

 

 

29.7

 

 

 

31.4

 

 

 

1.7

 

ppts.

 

 

30.0

 

 

 

29.9

 

 

 

(0.1

)

ppts.

 

Restaurant margin

 

 

15.1

%

 

 

12.4

%

 

 

2.7

 

ppts.

 

 

14.9

%

 

 

16.0

%

 

 

(1.1

)

ppts.

 

Operating margin

 

 

8.8

%

 

 

5.2

%

 

 

3.6

 

ppts.

 

 

13.0

%

 

 

11.4

%

 

 

1.6

 

ppts.

 

 

Percentages may not recompute due to rounding.

7


 

Yum China Holdings, Inc.

KFC Operating Results

(in US$ million)

(unaudited)

 

 

Quarter Ended

 

 

% Change

 

Year Ended

 

 

% Change

 

 

 

12/31/2020

 

 

12/31/2019

 

 

B/(W)

 

12/31/2020

 

 

12/31/2019

 

 

B/(W)

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Company sales

 

$

1,556

 

 

$

1,344

 

 

 

16

 

 

 

$

5,633

 

 

$

5,839

 

 

 

(4

)

 

 

Franchise fees and income

 

 

28

 

 

 

32

 

 

 

(12

)

 

 

 

125

 

 

 

136

 

 

 

(8

)

 

 

Revenues from transactions with

   franchisees and unconsolidated affiliates

 

 

14

 

 

 

16

 

 

 

(10

)

 

 

 

61

 

 

 

64

 

 

 

(4

)

 

 

Other revenues

 

 

1

 

 

 

 

 

NM

 

 

 

 

2

 

 

 

1

 

 

 

52

 

 

 

Total revenues

 

 

1,599

 

 

 

1,392

 

 

 

15

 

 

 

 

5,821

 

 

 

6,040