SHANGHAI, April 6, 2017 /PRNewswire/ -- Yum China Holdings,
Inc. (the "Company" or "Yum China") (NYSE: YUMC) today reported
unaudited results for the first quarter ended February 28, 2017.
First-Quarter Highlights
- Same-store sales grew 1%, including growth of 1% at KFC and 2%
at Pizza Hut Casual Dining.
- Total system sales grew 4%, including growth of 3% at KFC and
9% at Pizza Hut Casual Dining, excluding foreign currency
translation ("F/X").
- Opened 133 new restaurants during the quarter.
- Total restaurant margin increased 3.7 percentage points to
23.0%, primarily aided by the impact of retail tax structure reform
implemented on May 1, 2016.
- Operating profit grew 22%, and 27% excluding F/X, primarily
aided by the impact of retail tax structure reform. F/X negatively
impacted operating profit by $12
million.
- Net income increased 21% to $175
million.
- Adjusted EBITDA increased 14% to $320
million.
- Basic EPS increased 14% to $0.45
and diluted EPS increased 12% to $0.44.
Key Results
|
%
Change
|
|
System Sales
|
|
Same-Store
Sales
|
|
Net New
Units
|
|
Operating
Profit
|
|
|
|
|
|
|
|
|
Yum China
|
+4
|
|
+1
|
|
+6
|
|
+22
|
KFC
|
+3
|
|
+1
|
|
+5
|
|
+9
|
Pizza Hut Casual
Dining
|
+9
|
|
+2
|
|
+9
|
|
+67
|
|
First
Quarter
|
(in US$ million,
except
|
|
|
%
Change
|
for per share data
and percentages)
|
2017
|
|
2016
|
|
Reported
|
|
Ex F/X
|
Operating
Profit
|
$
|
254
|
|
$
|
209
|
|
+22
|
|
+27
|
Net Income
|
$
|
175
|
|
$
|
145
|
|
+21
|
|
+27
|
Adjusted
EBITDA
|
$
|
320
|
|
$
|
279
|
|
+14
|
|
+20
|
Basic EPS
|
$
|
0.45
|
|
$
|
0.40
|
|
+14
|
|
+19
|
Diluted
EPS
|
$
|
0.44
|
|
$
|
0.40
|
|
+12
|
|
+17
|
Note: All
comparisons are versus the same period a year ago.
Consistent with prior years, Yum China's fiscal first quarter
includes January and February results. First quarter 2016 had an
extra day resulting from leap year.
No Special Items in the first quarter 2016 or 2017.
Percentages may not recompute due to rounding.
|
CEO Comments
"I am very pleased with our performance in the first quarter of
2017, and at Yum China we are facing the future with increasing
confidence. Both KFC and Pizza Hut Casual Dining delivered positive
same-store sales in the first quarter of 2017, with KFC
successfully lapping a particularly strong year ago performance. In
addition to a good sales performance, our new unit builds,
restaurant margin and operating profit showed strong improvement.
We have over 7,600 restaurants, with a two-to-one lead over the
nearest Western Quick-Service Restaurant competitor and an
approximately six-to-one lead over the nearest Western Casual
Dining Restaurant competitor, in China", said Micky Pant, CEO.
"We are especially gratified with the progress made on two key
drivers of growth – Digital and Delivery. A network of over 4,400
restaurants in our system offer delivery services and we believe we
have established an infrastructure for continued growth. In
the first quarter of 2017, delivery represented about 12% of our
company sales. With approximately 93 million loyalty program
members between KFC and Pizza Hut Casual Dining, we believe we have
unprecedented insights into consumer behavior and have been
engaging with them across the digital eco-system: from pre-order to
payment.
We remain confident in our ability to deliver 550-600 new builds
while delivering a double digit growth in operating profit,
excluding F/X, in 2017. More importantly we feel our foundation is
even stronger to capitalize on the long-term potential of
China, and generate strong returns
for our stockholders."
New-Unit Development and Asset Upgrades
- Opened 133 new restaurants during the quarter. Remodeled 32
restaurants, led by KFC.
|
New
Units
|
Restaurant
Count
|
|
First
|
As of First
Quarter End
|
|
Quarter
|
|
2017
|
|
2016
|
Yum China
|
|
133
|
|
7,663
|
|
7,205
|
KFC
|
|
72
|
|
5,276
|
|
5,019
|
Pizza Hut Casual
Dining
|
|
30
|
|
1,738
|
|
1,596
|
Pizza Hut Home
Service, Little Sheep, East Dawning
and Taco Bell
|
|
31
|
|
649
|
|
590
|
Total Restaurant Count
|
Restaurant
Count
|
|
As of First
Quarter End
|
|
2017
|
|
2016
|
Restaurants
|
7,663
|
|
7,205
|
Company-owned
|
6,080
|
|
5,779
|
Unconsolidated
Affiliates
|
848
|
|
803
|
Franchisees
|
735
|
|
623
|
Digital and Delivery
- Members in the loyalty programs increased to approximately 70
million for KFC and 23 million for Pizza Hut Casual Dining at the
end of the first quarter of 2017.
- Mobile payments reached about 30% of company sales in the first
quarter of 2017, with over $500
million in company sales paid using cashless payment
methods.
- As of the end of the first quarter, over 4,400 restaurants
across China offered delivery
services. Delivery represented about 12% of company sales in the
quarter.
Restaurant Margin
- Restaurant margin for Yum China increased 3.7 percentage points
to 23.0%, primarily aided by the impact of retail tax structure
reform and profit generated from additional sales at KFC and Pizza
Hut Casual Dining, partially offset by wage inflation and commodity
inflation.
|
First
Quarter
|
|
2017
|
|
2016
|
|
% ppts
change
|
|
|
|
Yum China
|
23.0%
|
|
19.3%
|
|
3.7
|
KFC
|
23.6%
|
|
21.2%
|
|
2.4
|
Pizza Hut Casual
Dining
|
23.0%
|
|
15.8%
|
|
7.2
|
Conference Call
Yum China Holdings, Inc. will host a conference call to review
the Company's financial performance and strategies at
8:00 p.m. U.S. Eastern Time on
Wednesday, April 5, 2017
(8:00 a.m. Beijing/Hong Kong Time on Thursday, April 6, 2017). A copy of the
presentation will be available on the Yum China Holdings, Inc.
website, http://ir.yumchina.com.
U.S.:
|
|
+1-845-675-0437
|
Hong Kong:
|
|
+852-3018-6771
|
Mainland
China:
|
|
400-6208-038 or
800-8190-121
|
International:
|
|
+65-6713-5090
|
Passcode:
|
|
Yum China
|
A live webcast of the call may also be accessed at
http://edge.media-server.com/m/p/r6vbwxvk.
A replay of the conference call may be accessed by phone at the
following numbers two hours after the call ends until 9:00 a.m. U.S. Eastern Time on Thursday, April 13, 2017 (9:00 p.m. Beijing/Hong Kong Time on Thursday, April 13, 2017):
U.S.:
|
|
+1-855-452-5696
|
International:
|
|
+61-2-8199-0299
|
Passcode:
|
|
83022079
|
The webcast and the playback can be accessed via the internet by
visiting the Yum China Holdings, Inc. website,
http://ir.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," "plan," "estimate," "target," "predict," "likely,"
"will," "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 business plans and earnings and performance of
Yum China, anticipated effects of population and macroeconomic
trends, and statements regarding the capital structure of Yum
China. 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 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 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, 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
"Forward-Looking Statements" in our Annual Report on Form 10-K) 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,
which opened its first restaurant in China at the end of 2016. Yum China also owns
the Little Sheep and East Dawning concepts outright. Yum China is
well positioned for growth thanks to its strong competitive
position, integration of its brands into Chinese popular culture
and consumers' daily lives, expanding geographic footprint in
China and existing operational
expertise. It has a strong capital position, no external debt and
expects to continue growing its system sales and profit by adding
new restaurants and through growing same-store sales. Yum China had
more than 7,600 restaurants and more than 420,000 employees in over
1,100 cities at the end of February
2017. A new generation of younger consumers who are
digitally sophisticated and brand driven are fueling growth in
consumption in China. The ongoing
growth of the middle class and urban population in China is expected to create the world's
largest market for restaurant brands, with Yum China poised to be
the market leader.
Analysts are invited
to contact:
|
|
|
Christie Ju, Vice
President - Finance, Investor Relations, at +86 21 2407
8090
Elaine Lai, Director
- Finance, Investor Relations, at +86 21 2407 8278
|
|
|
|
Members of the media
are invited to contact:
|
|
|
Forest Liu, Director,
Public Affairs, at +86 21 2407 7505
|
Yum China
Holdings, Inc.
|
Condensed
Consolidated and Combined Summary of Results
|
(amounts in US$
million, except for number of shares and per share
amounts)
|
(unaudited)
|
|
|
|
Quarter
ended
|
|
|
% Change
|
|
|
2/28/2017
|
|
|
2/29/2016
|
|
|
B/(W)
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Company
sales
|
|
$
|
1,257
|
|
|
$
|
1,278
|
|
|
|
(2)
|
|
|
Franchise fees and
income
|
|
|
27
|
|
|
|
25
|
|
|
|
5
|
|
|
Total
revenues
|
|
|
1,284
|
|
|
|
1,303
|
|
|
|
(2)
|
|
|
Costs and
Expenses, Net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Company
restaurants
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Food and
paper
|
|
|
345
|
|
|
|
385
|
|
|
|
10
|
|
|
Payroll and employee
benefits
|
|
|
257
|
|
|
|
245
|
|
|
|
(5)
|
|
|
Occupancy and other
operating expenses
|
|
|
366
|
|
|
|
402
|
|
|
|
9
|
|
|
Company restaurant
expenses
|
|
|
968
|
|
|
|
1,032
|
|
|
|
6
|
|
|
General and
administrative expenses
|
|
|
67
|
|
|
|
66
|
|
|
|
-
|
|
|
Franchise
expenses
|
|
|
13
|
|
|
|
14
|
|
|
|
10
|
|
|
Refranchising gain,
net
|
|
|
(1)
|
|
|
|
(3)
|
|
|
|
(64)
|
|
|
Other income,
net
|
|
|
(17)
|
|
|
|
(15)
|
|
|
|
12
|
|
|
Total costs and
expenses, net
|
|
|
1,030
|
|
|
|
1,094
|
|
|
|
6
|
|
|
Operating
Profit
|
|
|
254
|
|
|
|
209
|
|
|
|
22
|
|
|
Interest income,
net
|
|
|
2
|
|
|
|
2
|
|
|
|
47
|
|
|
Income Before
Income Taxes
|
|
|
256
|
|
|
|
211
|
|
|
|
22
|
|
|
Income tax
provision
|
|
|
(76)
|
|
|
|
(62)
|
|
|
|
(23)
|
|
|
Net income -
including noncontrolling interests
|
|
|
180
|
|
|
|
149
|
|
|
|
21
|
|
|
Net income -
noncontrolling interests
|
|
|
5
|
|
|
|
4
|
|
|
|
10
|
|
|
Net Income - Yum
China Holdings, Inc.
|
|
$
|
175
|
|
|
$
|
145
|
|
|
|
21
|
|
|
Effective tax
rate
|
|
|
29.9
|
%
|
|
|
29.5
|
%
|
|
|
(0.4)
|
|
ppts.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic Earnings Per
Common
Share
|
|
$
|
0.45
|
|
|
$
|
0.40
|
|
|
|
14
|
|
|
Weighted average
shares outstanding
|
|
|
387,525,034
|
|
|
|
363,758,219
|
|
|
NM
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted Earnings
Per Common
Share
|
|
$
|
0.44
|
|
|
$
|
0.40
|
|
|
|
12
|
|
|
Weighted average
shares outstanding
|
|
|
395,347,021
|
|
|
|
363,758,219
|
|
|
NM
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Company
sales
|
|
|
100.0
|
%
|
|
|
100.0
|
%
|
|
|
|
|
|
Food and
paper
|
|
|
27.5
|
|
|
|
30.1
|
|
|
|
2.6
|
|
ppts.
|
Payroll and employee
benefits
|
|
|
20.5
|
|
|
|
19.2
|
|
|
|
(1.3)
|
|
ppts.
|
Occupancy and other
operating expenses
|
|
|
29.0
|
|
|
|
31.4
|
|
|
|
2.4
|
|
ppts.
|
Restaurant
margin
|
|
|
23.0
|
%
|
|
|
19.3
|
%
|
|
|
3.7
|
|
ppts.
|
Operating
margin
|
|
|
20.2
|
%
|
|
|
16.4
|
%
|
|
|
3.9
|
|
ppts.
|
|
Percentages may not
recompute due to rounding.
|
Yum China
Holdings, Inc.
|
KFC Operating
Results
|
(amounts in US$
million)
|
(unaudited)
|
|
|
|
Quarter
ended
|
|
|
% Change
|
|
|
2/28/2017
|
|
2/29/2016
|
|
B/(W)
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Company
sales
|
|
$
|
870
|
|
|
$
|
897
|
|
|
|
(3)
|
|
|
Franchise fees and
income
|
|
|
26
|
|
|
|
24
|
|
|
|
3
|
|
|
Total
revenues
|
|
|
896
|
|
|
|
921
|
|
|
|
(3)
|
|
|
Costs and
Expenses, Net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Company
restaurants
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Food and
paper
|
|
|
251
|
|
|
|
275
|
|
|
|
9
|
|
|
Payroll and employee
benefits
|
|
|
167
|
|
|
|
159
|
|
|
|
(6)
|
|
|
Occupancy and other
operating expenses
|
|
|
247
|
|
|
|
272
|
|
|
|
10
|
|
|
Company restaurant
expenses
|
|
|
665
|
|
|
|
706
|
|
|
|
6
|
|
|
General and
administrative expenses
|
|
|
25
|
|
|
|
24
|
|
|
|
(7)
|
|
|
Franchise
expenses
|
|
|
13
|
|
|
|
14
|
|
|
|
10
|
|
|
Closures and
impairment expenses, net
|
|
|
1
|
|
|
|
-
|
|
|
NM
|
|
|
Other income,
net
|
|
|
(15)
|
|
|
|
(14)
|
|
|
|
13
|
|
|
Total costs and
expenses, net
|
|
|
689
|
|
|
|
730
|
|
|
|
6
|
|
|
Operating
Profit
|
|
$
|
207
|
|
|
$
|
191
|
|
|
|
9
|
|
|
Company
sales
|
|
|
100.0
|
%
|
|
|
100.0
|
%
|
|
|
|
|
|
Food and
paper
|
|
|
28.9
|
|
|
|
30.7
|
|
|
|
1.8
|
|
ppts.
|
Payroll and employee
benefits
|
|
|
19.3
|
|
|
|
17.7
|
|
|
|
(1.6)
|
|
ppts.
|
Occupancy and other
operating expenses
|
|
|
28.2
|
|
|
|
30.4
|
|
|
|
2.2
|
|
ppts.
|
Restaurant
margin
|
|
|
23.6
|
%
|
|
|
21.2
|
%
|
|
|
2.4
|
|
ppts.
|
Operating
margin
|
|
|
23.8
|
%
|
|
|
21.3
|
%
|
|
|
2.5
|
|
ppts.
|
|
Percentages may not
recompute due to rounding.
|
Yum China
Holdings, Inc.
|
Pizza Hut Casual
Dining Operating Results
|
(amounts in US$
million)
|
(unaudited)
|
|
|
|
Quarter
ended
|
|
|
% Change
|
|
|
2/28/2017
|
|
2/29/2016
|
|
B/(W)
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Company
sales
|
|
$
|
339
|
|
|
$
|
328
|
|
|
|
3
|
|
|
Franchise fees and
income
|
|
|
-
|
|
|
|
-
|
|
|
NM
|
|
|
Total
revenues
|
|
|
339
|
|
|
|
328
|
|
|
|
3
|
|
|
Costs and
Expenses, Net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Company
restaurants
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Food and
paper
|
|
|
80
|
|
|
|
92
|
|
|
|
13
|
|
|
Payroll and employee
benefits
|
|
|
75
|
|
|
|
71
|
|
|
|
(6)
|
|
|
Occupancy and other
operating expenses
|
|
|
106
|
|
|
|
113
|
|
|
|
6
|
|
|
Company restaurant
expenses
|
|
|
261
|
|
|
|
276
|
|
|
|
6
|
|
|
General and
administrative expenses
|
|
|
14
|
|
|
|
13
|
|
|
|
-
|
|
|
Closures and
impairment expenses, net
|
|
|
(1)
|
|
|
|
-
|
|
|
NM
|
|
|
Total costs and
expenses, net
|
|
|
274
|
|
|
|
289
|
|
|
|
5
|
|
|
Operating
Profit
|
|
$
|
65
|
|
|
$
|
39
|
|
|
|
67
|
|
|
Company
sales
|
|
|
100.0
|
%
|
|
|
100.0
|
%
|
|
|
|
|
|
Food and
paper
|
|
|
23.7
|
|
|
|
28.2
|
|
|
|
4.5
|
|
ppts.
|
Payroll and employee
benefits
|
|
|
22.2
|
|
|
|
21.7
|
|
|
|
(0.5)
|
|
ppts.
|
Occupancy and other
operating expenses
|
|
|
31.1
|
|
|
|
34.3
|
|
|
|
3.2
|
|
ppts.
|
Restaurant
margin
|
|
|
23.0
|
%
|
|
|
15.8
|
%
|
|
|
7.2
|
|
ppts.
|
Operating
margin
|
|
|
19.3
|
%
|
|
|
12.0
|
%
|
|
|
7.3
|
|
ppts.
|
|
Percentages may not
recompute due to rounding.
|
Yum China
Holdings, Inc.
|
Condensed
Consolidated Balance Sheets
|
(amounts in US$
million, except for number of shares)
|
(unaudited)
|
|
|
|
2/28/2017
|
|
12/31/2016
|
ASSETS
|
|
|
|
|
|
|
|
Current
Assets
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
1,074
|
|
|
$
|
885
|
Short-term
investments
|
|
|
180
|
|
|
|
79
|
Accounts receivable,
net
|
|
|
68
|
|
|
|
74
|
Inventories,
net
|
|
|
231
|
|
|
|
268
|
Prepaid expenses and
other current assets
|
|
|
169
|
|
|
|
120
|
Total Current
Assets
|
|
|
1,722
|
|
|
|
1,426
|
Property, plant and
equipment, net
|
|
|
1,627
|
|
|
|
1,647
|
Goodwill
|
|
|
80
|
|
|
|
79
|
Intangible assets,
net
|
|
|
87
|
|
|
|
88
|
Investments in
unconsolidated affiliates
|
|
|
37
|
|
|
|
71
|
Other
assets
|
|
|
261
|
|
|
|
254
|
Deferred income
taxes
|
|
|
163
|
|
|
|
162
|
Total
Assets
|
|
|
3,977
|
|
|
|
3,727
|
LIABILITIES AND
EQUITY
|
|
|
|
|
|
|
|
Current
Liabilities
|
|
|
|
|
|
|
|
Accounts payable and
other current liabilities
|
|
|
984
|
|
|
|
971
|
Income taxes
payable
|
|
|
84
|
|
|
|
33
|
Total Current
Liabilities
|
|
|
1,068
|
|
|
|
1,004
|
Capital lease
obligations
|
|
|
28
|
|
|
|
28
|
Other liabilities and
deferred credits
|
|
|
251
|
|
|
|
252
|
Total
Liabilities
|
|
|
1,347
|
|
|
|
1,284
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
Common stock,
$0.01 par value; 1,000,000,000 shares authorized; 384,311,143
shares
and
383,344,835.42 shares issued and outstanding at February 28,
2017
and
December 31, 2016, respectively
|
|
|
4
|
|
|
|
4
|
Treasury
stock
|
|
|
(20)
|
|
|
|
(20)
|
Additional paid-in
capital
|
|
|
2,359
|
|
|
|
2,352
|
Retained
earnings
|
|
|
215
|
|
|
|
40
|
Accumulated other
comprehensive income
|
|
|
22
|
|
|
|
1
|
Total Equity
- Yum China Holdings, Inc.
|
|
|
2,580
|
|
|
|
2,377
|
Noncontrolling
interests
|
|
|
50
|
|
|
|
66
|
Total
Equity
|
|
|
2,630
|
|
|
|
2,443
|
Total Liabilities
and Equity
|
|
$
|
3,977
|
|
|
$
|
3,727
|
Yum China
Holdings, Inc.
|
Condensed
Consolidated and Combined Statements of Cash Flows
|
(amounts in US$
million)
|
(unaudited)
|
|
|
|
Quarter
ended
|
|
|
2/28/2017
|
|
2/29/2016
|
Cash Flows -
Operating Activities
|
|
|
|
|
|
|
|
Net income -
including noncontrolling interests
|
|
$
|
180
|
|
|
$
|
149
|
Depreciation and
amortization
|
|
|
64
|
|
|
|
68
|
Refranchising
gain
|
|
|
(1)
|
|
|
|
(3)
|
Deferred income
taxes
|
|
|
(1)
|
|
|
|
(19)
|
Equity income from
investments in unconsolidated affiliates
|
|
|
(17)
|
|
|
|
(16)
|
Share-based
compensation expense
|
|
|
3
|
|
|
|
3
|
Changes in accounts
receivable
|
|
|
8
|
|
|
|
(8)
|
Changes in
inventories
|
|
|
40
|
|
|
|
17
|
Changes in prepaid
expenses and other current assets
|
|
|
5
|
|
|
|
7
|
Changes in accounts
payable and other current liabilities
|
|
|
31
|
|
|
|
113
|
Changes in income
taxes payable
|
|
|
51
|
|
|
|
56
|
Other, net
|
|
|
(6)
|
|
|
|
6
|
Net Cash Provided
by Operating Activities
|
|
|
357
|
|
|
|
373
|
Cash Flows -
Investing Activities
|
|
|
|
|
|
|
|
Capital
spending
|
|
|
(74)
|
|
|
|
(80)
|
Purchase of
short-term investments
|
|
|
(100)
|
|
|
|
(54)
|
Proceeds from
refranchising of restaurants
|
|
|
2
|
|
|
|
7
|
Other, net
|
|
|
(1)
|
|
|
|
(1)
|
Net Cash Used in
Investing Activities
|
|
|
(173)
|
|
|
|
(128)
|
Cash Flows -
Financing Activities
|
|
|
|
|
|
|
|
Net
transfers from Parent
|
|
|
-
|
|
|
|
7
|
Payment of capital
lease obligations
|
|
|
(1)
|
|
|
|
-
|
Net Cash (Used in)
Provided by Financing Activities
|
|
|
(1)
|
|
|
|
7
|
Effect of Exchange
Rates on Cash
and Cash Equivalents
|
|
|
6
|
|
|
|
(5)
|
Net Increase in
Cash and Cash Equivalents
|
|
|
189
|
|
|
|
247
|
Cash and Cash
Equivalents - Beginning of Period
|
|
|
885
|
|
|
|
425
|
Cash and Cash
Equivalents - End of Period
|
|
$
|
1,074
|
|
|
$
|
672
|
Reconciliation of Reported Results to Non-GAAP
Measures
(amounts in US$ million)
(unaudited)
In this press release:
- The Company provides certain percentage changes excluding the
impact of F/X. These amounts are derived by translating current
year results at prior year average exchange rates. We believe the
elimination of the F/X impact provides better year-to-year
comparability without the distortion of foreign currency
fluctuations.
- System sales growth reflects the results of all restaurants
regardless of ownership, including Company-owned, franchise and
unconsolidated affiliate restaurants that operate our concepts,
except for non-Company-owned restaurants for which we do not
receive a sales-based royalty. Sales of franchise and
unconsolidated affiliate restaurants typically generate ongoing
franchise fees for the Company at a rate of approximately 6% of
system sales. Franchise and unconsolidated affiliate restaurant
sales are not included in Company sales on the Condensed
Consolidated and Combined Statements of Income; however, the
franchise fees are included in the Company's revenues. We believe
system sales growth is useful to investors as a significant
indicator of the overall strength of our business as it
incorporates all of our revenue drivers, Company and franchise
same-store sales as well as net unit growth.
- Same-store sales growth is the estimated percentage change in
sales of all restaurants that have been open and in the Company
system one year or more.
- Company Restaurant profit ("Restaurant profit") is defined as
Company sales less expenses incurred directly by our Company-owned
restaurants in generating Company sales. Company restaurant margin
percentage is defined as Restaurant profit divided by Company
sales.
In addition to the results provided in accordance with US
Generally Accepted Accounting Principles ("GAAP") in this press
release, the Company provides Adjusted EBITDA, which we define as net income including
noncontrolling interests adjusted for income tax, interest income,
depreciation, amortization and other items. This non-GAAP
measure is not intended to replace the presentation of our
financial results in accordance with GAAP. Rather, the
Company believes that the presentation of this non-GAAP measure
provides additional information to investors to facilitate the
comparison of past and present results. This non-GAAP measure
should not be considered in isolation or as a substitute for GAAP
financial results, but should be read in conjunction with the
unaudited Condensed Consolidated and Combined Summary of Results
and other information presented herein. A reconciliation of this
non-GAAP measure to its most directly comparable GAAP measure
follows.
Reconciliation of
Net Income to Adjusted EBITDA
|
(amounts in US$
million)
|
(unaudited)
|
|
Net income, along
with the reconciliation to Adjusted EBITDA, is presented
below.
|
|
|
|
Quarter
ended
|
|
|
2/28/2017
|
|
2/29/2016
|
Reconciliation of
Net Income to Adjusted EBITDA
|
|
|
|
|
|
|
|
Net Income - Yum
China Holdings, Inc.
|
|
$
|
175
|
|
|
$
|
145
|
Net income -
noncontrolling interests
|
|
|
5
|
|
|
|
4
|
Income tax
provision
|
|
|
76
|
|
|
|
62
|
Interest income,
net
|
|
|
(2)
|
|
|
|
(2)
|
Operating
Profit
|
|
|
254
|
|
|
|
209
|
Depreciation and
amortization
|
|
|
64
|
|
|
|
68
|
Store impairment
charges
|
|
|
2
|
|
|
|
2
|
Adjusted
EBITDA
|
|
$
|
320
|
|
|
$
|
279
|
Yum China
Holdings, Inc.
|
Segment
Results
|
(amounts in US$
million)
|
(unaudited)
|
|
Quarter Ended
2/28/2017
|
|
KFC
|
|
|
Pizza Hut
Casual
Dining
|
|
|
Others
|
|
|
Corporate
and
Unallocated
|
|
|
Total
|
|
Total
revenues
|
|
$
|
896
|
|
|
$
|
339
|
|
|
$
|
49
|
|
|
$
|
-
|
|
|
$
|
1,284
|
|
Company restaurant
expenses
|
|
|
665
|
|
|
|
261
|
|
|
|
42
|
|
|
|
-
|
|
|
|
968
|
|
General and
administrative expenses
|
|
|
25
|
|
|
|
14
|
|
|
|
5
|
|
|
|
23
|
|
|
|
67
|
|
Franchise
expenses
|
|
|
13
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
13
|
|
Closures and
impairment expenses, net
|
|
|
1
|
|
|
|
(1)
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Refranchising gain,
net
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(1)
|
|
|
|
(1)
|
|
Other income,
net
|
|
|
(15)
|
|
|
|
-
|
|
|
|
(2)
|
|
|
|
-
|
|
|
|
(17)
|
|
|
|
|
689
|
|
|
|
274
|
|
|
|
45
|
|
|
|
22
|
|
|
|
1,030
|
|
Operating Profit
(Loss)
|
|
$
|
207
|
|
|
$
|
65
|
|
|
$
|
4
|
|
|
$
|
(22)
|
|
|
$
|
254
|
|
|
|
Quarter
Ended 2/29/2016
|
|
KFC
|
|
|
Pizza Hut
Casual
Dining
|
|
|
Others
|
|
|
Corporate
and
Unallocated
|
|
|
Total
|
|
Total
revenues
|
|
$
|
921
|
|
|
$
|
328
|
|
|
$
|
54
|
|
|
$
|
-
|
|
|
$
|
1,303
|
|
Company restaurant
expenses
|
|
|
706
|
|
|
|
276
|
|
|
|
50
|
|
|
|
-
|
|
|
|
1,032
|
|
General and
administrative expenses
|
|
|
24
|
|
|
|
13
|
|
|
|
5
|
|
|
|
24
|
|
|
|
66
|
|
Franchise
expenses
|
|
|
14
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
14
|
|
Refranchising gain,
net
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(3)
|
|
|
|
(3)
|
|
Other income,
net
|
|
|
(14)
|
|
|
|
-
|
|
|
|
(1)
|
|
|
|
-
|
|
|
|
(15)
|
|
|
|
|
730
|
|
|
|
289
|
|
|
|
54
|
|
|
|
21
|
|
|
|
1,094
|
|
Operating Profit
(Loss)
|
|
$
|
191
|
|
|
$
|
39
|
|
|
$
|
-
|
|
|
$
|
(21)
|
|
|
$
|
209
|
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/yum-china-achieved-a-strong-first-quarter-with-same-store-sales-growth-of-1-operating-profit-grew-22-restaurant-margin-expanded-to-23-300435069.html
SOURCE Yum China Holdings, Inc