百胜中国实现强劲首季度表现，同店销售增长1%；运营盈利上升22%，餐厅利润上升至23% PDF Version 04/05/2017 at 4:30 PM EDT 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