Yum China : Presentation (YUMC 25Q1 PPT EN vF)

Published: 2025-04-30 05:58:20 ET YUMC

First Quarter 2025 Results Apr 30, 2025

NYSE: YUMC and HKEX: 9987

Solid Sales

Margin Expansion

Robust Profit Growth

System sales growth1

+2%

Q1 YoY

One fewer

Same-store sales index1

100%

Of 2024 level

+12%

Excl. F/X & mark-to-market impact

Q1 YoY

+8%

First time since

Margin

13.4%

Restaurant Margin

+8%

Q1 YoY

Core Operating Profit2

Operating Profit

+7%

18.6%

Diluted EPS

business day in 2025

Q1 2024

+80 bps +100 bps

Q1 YoY

9th consecutive quarter of Same-store transaction growth, +6% YoY

1 Excludes the impact of foreign exchange ("F/X").

2 Core Operating Profit is defined as Operating Profit adjusted for Special Items, further excluding Items Affecting Comparability and the impact of F/X. The Company uses Core Operating Profit for the purposes of

evaluating the performance of its core operations. 3

16,642

Total Stores

>15,000

4 years

>10,000

8 years

>5,000

25 years

Targets

To open 1,600-1,800 Net New Stores in 2025

To reach 20,000 stores by 2026

Net new stores

247 in Q1

Net new unit contribution to systems sales

4% in Q1

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

25'Q1

Total Stores Net New Stores

in Q1

Unlock underserved markets with flexible models

Reduced Average Capex2

Healthy New Store Payback3

11,943

13% Franchise

295

41% Franchise

2,300+

Cities with KFC

~700

Cities without KFC

~56%

Total stores in Tier 3-61

~1.5 mn RMB / store

~2 years

3,769 45

6% Franchise 33% Franchise

800+ ~1,500

Cities with Cities with KFC Pizza Hut but no Pizza Hut

~47%

Total stores in Tier 3-61

~1.2 mn RMB / store

~2-3 years

1 As of first quarter-end 2025.

2 Refers to stores opened in full year 2024.

3 Refers to Average Pre-tax Cash Payback Period assuming yearly cashflow is same as year 1, after deduction of 3% license fee and before G&A expenses and income tax; based on stores opened between January

2023 to December 2023. 5

~43%

~39%

~18%

+13%

YoY in Q1

19'Q1

24'Q1

25'Q1

~29%

~28%

~29%

~32%

~53%

Delivery

Sales grew 13%1 YoY in Q1

Sequentially grew market shares on delivery platforms

Takeaway

Ratio remained relatively stable

Ratio doubled from 2019 to 2025 Q1

+13%

YoY in Q1

~42%

~37%

~24%

~5%

~10%

~48%

~53%

~71%

1 Includes KFC and Pizza Hut.

Sales mix by channels

% of Company sales

19'Q1 24'Q1 25'Q1

Dine-in

Digital Sales Growth2

Member Growth

Digital orders1

Members (mn) 3

Member sales %4

93%

80%

86%

89% 89% 90%

63% 62% 65% 65% 66%

Higher digital or by increased d

55%

dering driven elivery mix

60%

52%

525+

540+

470+

410+

360+

300+

240+

2019 2020 2021 2022 2023 2024 2025 Q1

1 Includes KFC (Hangzhou KFC since December 2021 and Suzhou KFC since August 2020) and Pizza Hut.

2 Sales at Company-owned stores where orderings were placed digitally.

3 KFC and Pizza Hut loyalty programs combined, as of period-end.

2019 2020 2021 2022 2023 2024 2025 Q1

4 As a percentage of KFC and Pizza Hut's system sales in aggregate. From 2022, in addition to transactions in which members self-identified as members (i.e., through member QR code, using member coupons/ vouchers, ordering via Super-Apps or other own channels), member sales also include 1) transactions in which members order using our coupons/vouchers through third party e-commerce platforms, 2) Pizza Hut tableside orders paid through POS terminals, provided members could otherwise be identified as members. 2021 data restated to reflect this change. Before restatement, it was 61% in Q1 2021 for KFC and Pizza Hut

combined. 7

System sales growth YoY

Q1 2025

Same-store sales index

Same-store transaction growth of 4% YoY

Net new stores

OP margin

Operating profit

+50bps YoY

Total stores

+50bps YoY

Restaurant margin

OP growth YoY

Core OP Growth YoY

Photo: KFC store in Hangzhou Lingyin Temple (杭州灵隐寺店)

Innovating Classics and Broadening Appeal for Smaller Gatherings

Extended New Offerings of Hero Categories Widened Options to Capture Smaller Party Needs

Spicy Flavor of Original Recipe Chicken

Golden Bucket

Featuring Spicy Flavor of Original Recipe Chicken

Smaller Bucket

Spicy Flavor of Original Recipe Chicken Burger

Sales of CNY Buckets increased by

50%+ year-over-year 9

Expanding dayparts and boosting afternoon sales

Photo: KCOFFEE Cafe in Chengdu Leading Center（成都领地中心店） 10

Pizza Hut Sustained Positive Momentum

Q1 2025

System sales growth YoY

Net new stores

OP margin

+220bps YoY

Operating profit

Same-store sales index

Same-store transaction growth of 17% YoY

Total stores

Restaurant margin

+190bps YoY

OP growth YoY

Core OP growth YoY

Photo: Pizza Hut store in Xi'an Rongmin Times Square (西安荣民时代广场店)

Pizza Dough Burger

Pizza Hut WOW Menu One-person Meal

Da Hong Pao

Oolong Tea

超至披萨风味汉堡

Super Supreme Burger

Japanese-style Mochi Dango

Lemon Black Tea

芝士和牛至尊堡

Cheesy Baked Corn

Wagyu Beef Cheese Burger

Crème Brûlée Toast

一人食主食小食随心选

Golden Crispy

Potato Lattice

Various choices for one-person meal

Capex can be as low as half of a regular Pizza Hut store

Photo: Pizza Hut WOW in Zhuhai Pingsha (珠海平沙店)

Capital Returns to Shareholders1

$mn

$4.7bn since spin-off

1,490

833

668

473

442

166

278

102

2017 2018 2019 2020 2021 2022 2023 2024

262

172 90

25'Q1

Dividends

Share repurchase

Target capital returns2 Net Cash3

$4.5bn

in 2024-26

$3bn

in 2025-26

$2.8bn

by end of Mar 2025

Avg. annual amount

~9% of market cap4

Quarterly Cash Dividends

$0.16

Q1 2024

$0.24

+50%

Q1 2025

Share Repurchases

$360mn

Agreements for 1H 2025 in the U.S. & Hong Kong

1 Includes dividends and share repurchases. Share repurchase amount excludes 1% excise tax and commissions.

2 Based on current expectations, which may change based on market conditions, capital needs or otherwise. Subject to Board approval on dividends and share repurchases, as well as shareholders' approval on share repurchases.

3 Refers to $825mn cash and cash equivalents, $1,167mn short-term investments and $932mn long-term bank deposits and notes, net of $129mn in short-term borrowings.

4 Market capitalization as of Apr 29, 2025

Appendix

First Quarter

2019

2024

2025

2025 vs 2024

2025 vs 2019

No. of Stores

8,653

15,022

16,642

+11%

+92%

Total Revenues ($ mn)

2,304

2,958

2,981

+1%

+29%

Members (mn)

195+

~485

540+

+11%

+177%

Member Sales %

47%

65%

66%

+1ppt

+19ppt

Operating Profit ($ mn)

303

374

399

+7%

+32%

OP Margin (% of revenue)

13.1%

12.6%

13.4%

+0.8ppt

+0.3ppt

Note: The comparison of revenue and operating profit include the impact of foreign exchange. 17

Sales and Profit Grew YoY in First Quarter

Revenue/Sales YoY

Total Revenue ($bn)

Key factors for Revenue year-over-year change

+ Net new unit contribution

One fewer business day in 2025

Foreign exchange impact

Revenue growth (reported) +1%

Revenue growth (ex F/X) +2% System sales growth +2%

2.96 2.98

24'Q1 25'Q1

$mn

Operating Profit Special items

24'Q1

374

25'Q1

399

Key factors for Core OP year-over-year change

+ Net new unit contribution

+ Favorable commodity prices

+ Efficiency improvement from simplified operations

+ G&A expense savings

Increased value-for-money offerings

Wage inflation

Increased closure & impairment expenses from store optimization

Operating Profit/Core OP YoY

OP growth (reported) OP growth (ex F/X)

Core OP growth

+7%

+8%

Items affecting comparability

Foreign currency translation

Core operating profit

374

405

25'Q1

YoY Sales Growth

Channel Mix

Members

Digital orders

System Sales YoY

Same-store sales YoY

Same-store transactions YoY

Average ticket YoY

Delivery

Total off-premise

Million

Member sales %

Sales %

+3% Even +4% (4)%

43% 71%

505+ 67%

92%

25'Q1 RMB 40 Relatively 24'Q1 RMB 42 stable

+2% Even +17% (14)%

42% 52%

190+ 61%

95%

25'Q1 RMB 78 In line with strategy to 24'Q1 RMB 91 target mass market

Key ESG Initiatives

Food

Food Safety as Top Priority

End-to-end food safety and quality management system with tech-enabled controls across the value chain

Healthy & Balanced Meals

Offer healthier, more balanced choices and diverse menu options to support a healthy lifestyle

* as of Dec 31, 2024.

Environment

Climate Action

Committed to 2050 net-zero GHG emissions

>370% YoY growth in

YUMC's renewable energy consumption*

Circular Economy

Strive to achieve "Zero-Waste Restaurants" by adhering to the 4R principle (Reduce, Reuse, Replace, Recycle)

People

"People First" Philosophy

Provide comprehensive support to ensure the wellbeing of our employees - e.g., medical insurance coverage for RGMs, eligible employees and their families

Diversity, Equity & Inclusion

Foster a fair and inclusive workplace;

66 "Angel Restaurants"

in 66 cities*

Community

Rural Revitalization

One Yuan Donation - 18 years of commitment, RMB270mn+ raised, benefitted 1mn+ children*

Community Support

Food banks in ~1,000 locations across 150+ cities*

Little Migratory Birds Fund benefitted 6mn+ children*

Industry No.1 on DJSI for the 5th Year

"China Top Employer" for the 7th Year, #2 in China

Industry No.1 in S&P Global 2024 Corporate Sustainability Assessment

The only Mainland China consumer services company included in the DJSI World Index

#1 in the restaurant industry for the 4th year

#2 in China, among 156 companies

Industry No.1

Industry No.1 Industry Leader

Resiliency and profitability

Outperformed the industry in good times and bad

Tremendous growth potential

Target 20,000 stores

by 2026

Significant capital returns to shareholders

Target to return

~$4.5bn in 2024-20261

Commitment to Building Long-lasting Excellence

Operational efficiency and discipline

Project Fresh Eye & Red Eye transformed the business ahead of times

Innovation & consumer-centric mindset

Good food, great value & breakthrough business models

Integrated supply chain mgmt system

Key enabler of food safety, innovations & cost competitiveness

Pioneering end-to-end digitalization

Embrace & unleash the power of technologies

1 Based on current expectations which may change based on market conditions, capital needs or otherwise. Subject to Board approval on dividends and share repurchases, as well shareholders' approval on share repurchases

(in $mn)

Yum China

* Current period amounts are derived by translating results at average exchange rates of the prior year period. 23

(in $mn)

Largest restaurant company in China1

Fortune 500

company

16,000+

restaurants

2,300+

cities in China

6 restaurant brands

Vision: To be the world's most innovative pioneer in the restaurant industry

Company website: https://http://ir.yumchina.com

Investor Relations Contact: [email protected] Tel: +86 21 2407 7556

Media Contact: [email protected] Tel: +86 21 2407 8288 / +852 2267 5807

1 In terms of system sales. 26

Disclaimer

Yum China Holdings Inc. published this content on April 30, 2025, and is solely responsible for the information contained herein. Distributed via Public Technologies (PUBT), unedited and unaltered, on April 30, 2025 at 09:53 UTC.