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Trademarks and Brands. We use Yum! Brands and the Yum! logo as our trademarks. Product names and services appearing in this presentation are trademarks of Yum! Brands, Inc. or
its subsidiaries. This presentation also may refer to brand names, trademarks, service marks and trade names of other companies and organizations, and these brand names, trademarks,
service marks and trade names are the property of their respective owners.
Market and Industry Data. Unless we indicate otherwise, we base the information concerning our industry contained in this presentation on our general knowledge of and expectations
concerning the industry. Our market position and market share is based on our estimates using data from various industry sources and assumptions that we believe to be reasonable
based on our knowledge of the industry. We have not independently verified the data obtained from these sources and cannot assure you of the datas accuracy or completeness.
Non-GAAP Measures. This presentation includes certain non-GAAP financial measures. Reconciliation of these non-GAAP financial measures to the most directly comparable GAAP
measures are included on our website at http://www.yum.com/investors. Investors are urged to consider carefully the comparable GAAP measures and reconciliations.
New Yum! Brands, Inc.
3x Unit Growth Potential; Franchise-led Unit Growth Driven By Attractive Unit Economics 4
Two Unique, Best-In-Class Companies
New
2016PF Operating Profit
Current 2016F Operating Profit
New 32%
48%
12%
~20%
24%
China
~80%
Note: 2016PF
Note: is Forma
2016 Pro defined as NewasYum!
is defined with Yum
New Yum! Chinacontributing
with China contributing 12 months
12 months as licensee;
as licensee; Yumfee
3% license China Pizza Hut
on 2016PF Chinaexcludes HomeHutService
KFC and Pizza system sales is included in KFC and Pizza Hut divisions, respectively
Todays Objectives
New
Unit Growth Profile -
Emerging Market Growth Profile -
Diversification of Multiple Brands - -
Geographic Breadth -
Advantaged Tax Rate - - -
Strong Return of Capital Profile
Refranchising Opportunity - - -
Today New
Operating Risk Moderate Low
Greg Creed
CEO, Yum! Brands
At Yum!, We Have Built a Defining Global Company
1997-2007 2008-2016
Grow our brands; Drive aggressive international
Strategy enter new markets; growth in developed and
massive China expansion emerging markets
1 2 3
Brand Strength
Growth Transformation Mindset
FROM TO
Mindset Own to Earn Own to Learn
7O%WTH
Total
+ =
Net-New
SSSG Unit System
Growth Sales
GR
We Will Leverage the Collective Power of Our Brands to Grow
Through Franchising and Win Across the Globe
THE KEY DRIVERS OF SAME-STORE SALES GROWTH AND NET-NEW UNIT GROWTH 24
Distinctive, Relevant Brands
Distinctive, Relevant Brands
Distinctive, Relevant Brands
Unmatched Franchise Operating Capability
Unmatched Franchise Operating Capability
Unmatched Franchise Operating Capability
34
Unrivaled Culture & Talent
The New Yum! Brands Is a Transformed Yum! Where
We Deliver Long-term Sustainable Results in Every Market We Operate by Being
2016 Update
New Yum! Brands New Yum! Brands
Transformation Outlook
2016F Pro Forma Snapshot
New New Yum! Only
New
Financial Transformation Well Underway
Note: G&A reductions based off of 2015 Pro Forma base with Yum China contributing 12 months as licensee; Free Cash Flow defined as EBITDA less Interest, Tax, Refranchising Loss (gain), Non-cash FX Gains and Capex
For a Transformed Yum!
New
1 2 3
REDUCE INCREASE INCREASE
VOLATILITY FREE CASH CAPITAL
FLOW RETURN
At least 98% franchise Higher SSSG ~$6.1BN of capital to be
returned in 2016
Less volatility from China Higher New Unit Growth
~$6.5BN to ~$7.0BN of
~$300MM G&A Reduction
capital to be returned
Capex reduced from ~ from 2017-2019
$500MM to ~$100MM
Note: Years represent end of year data; 2015 franchise % excludes China joint venture units
Yum! Will be Amongst the
New Most Franchised Companies in the Sector
QSR DNKN
New Yum! 100% 100%
DPZ
97% 98%
WEN
95%
SONC
90%
MCD
85%
JACK
74%
New Yum! Refranchising
to be Completed by
PNRA
55%
FYE 2018
CMG
0%
Note: Percentages based off of FYE 2016F; New Yum! percentage based off of FYE 2018F
Source: Company filings and consensus research
Geographically Diversified Portfolio of
New Recurring, Capital-Light Franchise Fees
EUROPE
13% of Franchise Fees
US
44% of Franchise Fees
ASIA
24% of Franchise Fees
MENA / AFRICA
CANADA & LATIN AMERICA 7% of Franchise Fees AUSTRALIA
8% of Franchise Fees
4% of Franchise Fees
Note: As of 2016F Pro Forma; 2016F Pro Forma is post China separation with Yum China contributing 12 months of a 3% license fee to New Yum!
~$350
KFC PH TB
~$25 ~$30-35
New
Drive Higher System Sales Growth
Net-New Unit
SSSG
Growth
INCREASE
New Yum! Transformation Will FCF
New
Drive Higher System Sales Growth
FOCUS
Net-New Unit
SSSG
Growth
INCREASE
~$300MM of Cumulative G&A Reductions, FCF
3.4%
~2.7% ~2.8%
2.5%
~2.2%
~1.7%
~1.3%
YUM (2015) YUM (2015PF) YUM (2019F) QSR (2015) DNKN (2015) DPZ (2015) MCD (2015)
% Franchised: 77% 93% 98% 100% 100% 97% 82%
Note: 2015 franchise % excludes China joint venture units; 2015PF is post China separation
Source: Morgan Stanley Research, company estimates
INCREASE
FCF
New
Reducing Required Annual Capital Expenditures
~$100
capital markets $1.0BN Revolving Credit Facility $0 0.0x 5 Years Ba1 / BBB- L+225bps
payments Taco Bell Securitized Notes 2,300 3.7x ~7 Years NR / BBB ~4.5%
Note: 1 Free Cash Flow defined as EBITDA less Interest, Tax, Refranchising Loss (gain), Non-cash FX Gains and Capex 2 Q4 2015 Actual includes initial share repurchases post $6.2BN capital return announcement plus dividends paid
in the quarter; 3 2016 includes portions of the previously announced $6.2BN in capital returns as well as dividends for the year; 4 2017-2019 Target includes expected dividends and share repurchases
Financial Discipline
New
Underlying Capital Allocation Strategy
Pay a Competitive
Ensure Ample Targeted Capital Dividend Consistent with
Liquidity and Low Investments Current Payout Ratio of
Refinancing Risk
45% - 50%
EBITDA
Operating Profit
EPS
Note: 2015 Pro Forma is post China separation; Free Cash Flow defined as EBITDA less Interest, Tax, Refranchising Loss (gain), Non-cash FX Gains and Capex
>70%+ Increase to EPS by 2019 with
New Improved FCF Conversion
EPS FCF Conversion
>$3.75
~100%
$3.75
100%
$3.25 95%
$2.75 90%
~$2.20 85%
$2.25 85%
$1.75 80%
2015PF 2019F 2015PF 2019F
Note: 2015PF excludes Yum Chinas 2015 Operating Profit and includes a 3% license fee of Chinas 2015 System Sales; Free Cash Flow defined as EBITDA less Interest, Tax, Refranchising Loss (gain), Non-cash FX Gains and Capex
1 2 3 4 6
New
Elements of EPS Growth
Only ~30% of EPS increase attributable to SSSG
>$3.75
The remainder is primarily attributable to:
New Unit Growth, G&A Reductions,
~70%
Refranchising Efforts, Share Repurchases
and Other Financial Strategies
Reduces execution risk
>70%+ increase to 2015PF EPS by 2019
~30%
~$2.20
Improved Free Cash Flow Conversion of
~100% by 2019
Note: 2015PF is defined as New Yum! with Yum China contributing 12 months as licensee
Agenda
Capex ~$0.1BN
1 2 3 4 6
New
Financial Transformation Well Underway
12 quarters in a row
9 countries +500 net units
of positive SSSG 9% profit CAGR
entered past 2 international
15 quarters in a row for 2nd year in a row over past 4 years1
years
of profit growth1
1. On Ex F/X basis
Note: All values exclude China & India
Leveraging the full global power of KFC
2014
2017
US
2016
China
India
Accelerating the turnaround in key markets
KFC US KFC India
+7% +6%
2 yr stacked SSSG SSSG
+5 ppt +5 ppt
2 yr stacked Op. Profit Margin
Op. Profit Margin Improvement
Improvement
(Ex. Acceleration Agreement)
OUR PURPOSE
KFC celebrates originality
OUR PROMISE
Irresistible tastes and
memorable experiences
Canada Hockey Spot
SOPAC Construction Spot
On the ground floor of global growth
KFC
current
penetra?on
(units
per
MM
popula9on)
27
13
4
1
Paris
Harnessing the full potential of digital
Expanding delivery around the world
81
A huge runway of opportunity ahead
60K Restaurants
$3+ BN EBITDA
October 11, 2016
YUM! BRANDS
Annual Investor
Conference
Greg Creed
CEO, Yum! Brands
ep information Keep informatio
above this mark above this mark
when possible when possible
$12+ BN 16,000 103
SYSTEM SALES UNITS COUNTRIES
YUM! BRANDS
Annual Investor
Conference
Artie Starrs
President, Pizza Hut US
&
ep information
above this mark
when possible
Milind Pant Keep informatio
above this mark
when possible
SSTG
~1% ~6%
ep information
above this mark
when possible
SSSG
~1% ~3%
Note: Performance Through 3Q16
Keep informatio
above this mark
when possible
CONSISTENT VALUE REINFORCING BETTER & EASY
GRILLED
CHEESE
STUFFED CRUST
Insights-Based
Innovation With Core
Pizza Hut Equities
ep information Keep informatio
above this mark above this mark
when possible when possible
EASIER EXPERIENCES ON ~$2+ BN PIZZA STORE
Access To Popular Pizzas Social Ordering Visible Promise Time
BETTER
Food Value
& EASY
Experience
ep information Keep informatio
above this mark above this mark
when possible when possible
ROLLING OUT THAILANDS PROVEN GROWTH MODEL
THAILAND SSSG
20% Australia
15%
South Korea
10%
Russia
5%
India
Canada
0%
ep information Keep informatio
above this mark above this mark
when possible -5% when possible
Proprietary E-Commerce
Platform
Major Market Launch in
2017
ep information Keep informatio
above this mark above this mark
when possible when possible
ACCELERATING UNIT GROWTH
INTERNATIONAL NET-NEW UNITS
3.5X
In 6 Years
300
252 235
179 183
84
ep information
above this mark
2011 2012 2013 2014 2015 2016F Keep informatio
above this mark
when possible when possible
Note: International Figures Prior to 2016 exclude India Business Unit. International Figures Prior To 2015 exclude Mauritius. Excludes Transfer of Hawaii, Guam and Saipan to U.S. Business Unit. Excludes US and China.
GROWING WITH COMPELLING NEW ASSETS
2016F
ep information
above this mark
when possible
60
RESTAURANTS
TANZANIA
Keep informatio
above this mark
when possible
2016F
ep information
above this mark
when possible
70
RESTAURANTS
TANZANIA
Keep informatio
above this mark
when possible
~2 RESTAURANTS/DAY
ep information Keep informatio
above this mark above this mark
when possible when possible
Note: Represents target restaurant openings for Pizza Hut Global, including U.S. & China Note: Represents target restaurant count for Pizza Hut Global, including U.S. & China
TODAY 2020
OPENING OPENING
~2 ~3
RESTAURANTS/DAY RESTAURANTS/DAY
ep information Keep informatio
above this mark above this mark
when possible when possible
Note: Represents
Note: Represents target restaurant target
openings for Pizza restaurant
Hut Global, includingcount
U.S. &for Pizza Hut Global, including U.S. & China
China
ep information Keep informatio
above this mark above this mark
when possible when possible
Yum! brands
Annual Investor Conference
Brian Niccol
Ceo, taco bell
October 11, 2016
Taco Bell Benefits From New Yum!s Transformation
N
B
Distinctive Insights
SSSG Hi-Lo Approach Across Dayparts and Platforms
Bacon Club
Leading in Digital Communication & Access
Designing Our Business to Be Flexible & Relevant
Freestanding Inline Walk-Up
For Franchisees & Customers
Expecting ~250 New
Domestic Restaurants
in 2016
700+ Openings in
US 2014-2016F
15% Return on
Investment
Note: Return shown is the IRR of new restaurants opened by Taco Bell as of Q3 2016.
Represents the IRR from 20-year projected cash flows based on new units over the past 24 months as of Q3 2016
Going from US to Global Powerhouse Franchisor
Today 2022E
US 6,975 8,000+
International 300 Units in 22 Countries 1,000+ Units in 40 Countries
7,275 9,000+
Note: Restaurant counts are rounded to nearest 25 and include multi-brand and license restaurants.
Spain