0001564590-21-038662.txt : 20210728 0001564590-21-038662.hdr.sgml : 20210728 20210728164600 ACCESSION NUMBER: 0001564590-21-038662 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 15 CONFORMED PERIOD OF REPORT: 20210728 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20210728 DATE AS OF CHANGE: 20210728 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Yum China Holdings, Inc. CENTRAL INDEX KEY: 0001673358 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-EATING PLACES [5812] IRS NUMBER: 812421743 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-37762 FILM NUMBER: 211123133 BUSINESS ADDRESS: STREET 1: 7100 CORPORATE DRIVE CITY: PLANO STATE: TX ZIP: 75024 BUSINESS PHONE: (469)980-2898 MAIL ADDRESS: STREET 1: 7100 CORPORATE DRIVE CITY: PLANO STATE: TX ZIP: 75024 FORMER COMPANY: FORMER CONFORMED NAME: Yum! China Holding, Inc. DATE OF NAME CHANGE: 20160428 8-K 1 yumc-8k_20210728.htm 8-K yumc-8k_20210728.htm
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): July 28, 2021

 

Yum China Holdings, Inc.

(Exact Name of Registrant as Specified in its Charter)

 

 

Delaware

 

001-37762

 

81-2421743

(State or other jurisdiction of

incorporation or organization)

 

(Commission

File Number)

 

(I.R.S. Employer

Identification No.)

 

7100 Corporate Drive

Plano, Texas 75024

United States of America

 

Yum China Building

20 Tian Yao Qiao Road

Shanghai 200030

People’s Republic of China

(Address, including zip code, of principal executive offices)

 

(469) 980-2898

(Registrant's telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

Trading

Symbol(s)

Name of each exchange on which registered

Common Stock, par value $0.01 per share

YUMC

  New York Stock Exchange

9987

The Stock Exchange of Hong Kong Limited

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 

 


 


 

 

Item 2.02.

Results of Operations and Financial Condition.

 

On July 28, 2021, Yum China Holdings, Inc. issued a press release announcing its unaudited results for the second quarter ended June 30, 2021. A copy of the press release is being furnished as Exhibit 99.1 to this Current Report on Form 8-K.

 

Item 9.01.

Financial Statements and Exhibits.

 

(d)    Exhibits.

 

The following exhibits are furnished with this report:

 

Exhibit No.

 

Exhibit Description

 

 

 

99.1

 

Press Release of Yum China Holdings, Inc. issued July 28, 2021.

104

 

Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

 


 

 

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

 

YUM CHINA HOLDINGS, INC.

 

 

 

 

 

By:

 

/s/ Joseph Chan

 

 

 

 

Name:

 

Joseph Chan

 

 

 

 

Title:

 

Chief Legal Officer

Date: July 28, 2021

 

 

 

 

 

 

 

 

EX-99.1 2 yumc-ex991_6.htm EX-99.1 yumc-ex991_6.htm

Exhibit 99.1

Yum China Reports Second Quarter 2021 Results

 

Total Revenues grew 29%. System Sales grew 14% and Same-Store Sales were up 5% in constant currency

Opened 404 new stores; Total stores reached 11,023, an increase of 1,069 stores year over year

Reported $233 million Operating Profit

 

Shanghai, China (July 28, 2021) – Yum China Holdings, Inc. (the “Company” or “Yum China”) (NYSE: YUMC and HKEX: 9987) today reported unaudited results for the second quarter ended June 30, 2021.

 

Impact of COVID-19 Outbreak and Mitigation Efforts  

 

Second quarter operations improved from a year ago. System sales and operating profit grew year over year. System sales growth was led by accelerated new store openings and same-store sales growth. Operating profit growth was further driven by lower commodity prices, and productivity improvements.

 

The COVID-19 pandemic continued to impact the Company’s operations and results in the second quarter. Same-store sales recovery to pre-COVID levels was interrupted by the Delta variant outbreak in southern China, which started in late May. Local authorities tightened preventive health measures and social distancing requirements. Many communities were locked down. At the peak of this outbreak, approximately 400 of our restaurants were either temporarily closed or provided delivery and takeaway services only. This represents nearly 30% of our restaurants in Guangdong province, which has two of the four tier one cities in China, is the largest economy in China and one of Yum China’s largest markets. Across China, cautious consumer behavior persists as sporadic outbreaks remind consumers of the lingering risks. Same-store dine-in volume is still well below 2019 levels while off-premise occasions continue to grow rapidly. Overall, the pace of recovery varied by region with eastern and western China recovering relatively faster.

 

Traffic at our transportation and tourist locations improved from the first quarter but remained well below pre-COVID levels. According to government statistics, tourism spending for the three holidays in the second quarter was still down 20% to 40% compared to 2019. The impact was more pronounced for KFC, with its higher mix of stores in transportation and tourist locations.

 

As we entered July, traffic and sales continue to be pressured by lingering effects of COVID-19, such as reduced travel, a shortened school holiday and regional outbreaks in Yunnan. The latest outbreak in Nanjing, the capital city of Jiangsu province, is still evolving. The Company continues to expect that a full recovery of same-store sales will take time, with the recovery path impacted by regional resurgences and the corresponding public health measures. We will continue to focus on the elements of the business under our control, such as food innovation, compelling value propositions, a focus on customer experience, and operating efficiency, to drive sales and protect margins.

 

Second Quarter Highlights

 

 

Total revenues increased 29% year over year to $2.45 billion from $1.90 billion (a 17% increase excluding foreign currency translation (“F/X”)).

 

Total system sales increased 14% year over year, with increases of 14% at KFC and 16% at Pizza Hut, excluding F/X.

 

Same-store sales increased 5% year over year, with increases of 4% at KFC and 11% at Pizza Hut, excluding F/X.

 

Opened 404 new stores during the quarter.

 

Total store count reached 11,023 as of June 30, 2021, an increase of 1,069 stores over the past year.

 

Restaurant margin was 15.8%, compared with 13.7% in the prior year period.

 

Operating Profit increased 83% year over year to $233 million from $128 million (a 65% increase excluding F/X).

 

 

Adjusted Operating Profit increased 80% year over year to $237 million from $132 million (a 63% increase excluding F/X).

 

 

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

 


 

 

 

Effective tax rate was 24.8%.

 

Net Income increased 37% to $181 million from $132 million in the prior year period, primarily due to the increase in Operating Profit.

 

 

Adjusted Net Income increased 36% to $185 million from $136 million in the prior year period (a 72% increase excluding the net gains of $5 million and $31 million in the second quarter of 2021 and 2020, respectively, from our mark-to-market equity investments; a 55% increase if further excluding F/X).

 

Diluted EPS increased 24% to $0.42 from $0.34 in the prior year period.

 

Adjusted Diluted EPS increased 20% to $0.42 from $0.35 in the prior year period (a 52% increase excluding the net gains from our mark-to-market equity investments in the second quarter of 2021 and 2020; a 37% increase if further excluding F/X).

 

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

 

Key Financial Results

Second Quarter 2021

 

 

 

Year to Date Ended 6/30/2021

 

 

 

% Change

 

 

 

% Change

 

 

 

System Sales

 

 

Same-Store Sales

 

 

Net New Units

 

 

Operating Profit

 

 

 

System Sales

 

 

Same-Store Sales

 

 

Net New Units

 

 

Operating Profit

 

 

Yum China

 

+14

 

 

 

+5

 

 

 

+11

 

 

 

+83

 

 

 

 

+24

 

 

 

+8

 

 

 

+11

 

 

 

+156

 

 

        KFC

 

+14

 

 

 

+4

 

 

 

+13

 

 

 

+50

 

 

 

 

+19

 

 

 

+5

 

 

 

+13

 

 

 

+81

 

 

        Pizza Hut

 

+16

 

 

 

+11

 

 

 

+7

 

 

 

+151

 

 

 

 

+33

 

 

 

+23

 

 

 

+7

 

 

NM

 

 

 

 

Second Quarter

 

 

 

 

Year to Date Ended 6/30

 

 

(in US$ million, except

 

 

 

 

 

 

 

 

 

 

% Change

 

 

 

 

 

 

 

 

 

 

 

 

 

% Change

 

 

per share data and percentages)

 

2021

 

 

 

2020

 

 

Reported

 

 

Ex F/X

 

 

 

 

2021

 

 

 

2020

 

 

Reported

 

 

Ex F/X

 

 

Operating Profit

$

 

233

 

 

$

 

128

 

 

 

+83

 

 

 

+65

 

 

 

$

 

575

 

 

$

 

225

 

 

 

+156

 

 

 

+134

 

 

Adjusted Operating Profit1

$

 

237

 

 

$

 

132

 

 

 

+80

 

 

 

+63

 

 

 

$

 

582

 

 

$

 

230

 

 

 

+153

 

 

 

+132

 

 

Net Income

$

 

181

 

 

$

 

132

 

 

 

+37

 

 

 

+24

 

 

 

$

 

411

 

 

$

 

194

 

 

 

+112

 

 

 

+93

 

 

Adjusted Net Income1

$

 

185

 

 

$

 

136

 

 

 

+36

 

 

 

+23

 

 

 

$

 

418

 

 

$

 

199

 

 

 

+110

 

 

 

+92

 

 

Basic Earnings Per Common Share

$

 

0.43

 

 

$

 

0.35

 

 

 

+23

 

 

 

+11

 

 

 

$

 

0.98

 

 

$

 

0.51

 

 

 

+92

 

 

 

+75

 

 

Adjusted Basic Earnings Per

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Common Share1

$

 

0.44

 

 

$

 

0.36

 

 

 

+22

 

 

 

+11

 

 

 

$

 

0.99

 

 

$

 

0.53

 

 

 

+87

 

 

 

+72

 

 

Diluted Earnings Per Common Share

$

 

0.42

 

 

$

 

0.34

 

 

 

+24

 

 

 

+12

 

 

 

$

 

0.95

 

 

$

 

0.50

 

 

 

+90

 

 

 

+72

 

 

Adjusted Diluted Earnings Per

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Common Share1

$

 

0.42

 

 

$

 

0.35

 

 

 

+20

 

 

 

+9

 

 

 

$

 

0.96

 

 

$

 

0.51

 

 

 

+88

 

 

 

+73

 

 

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 not meaningful.

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.

 

CEO and CFO Comments

 

Joey Wat, CEO of Yum China, commented, “We delivered another quarter of solid performance. Pizza Hut achieved stellar performance and is expected to become another growth engine. KFC remained resilient and drove robust system sales and operating profit growth. Yum China continues to accelerate store network expansion. In less than one year, we increased total store count from 10,000 to over 11,000 stores. With 719 gross new stores opened in the first half, we now expect to open around 1,300 new stores in 2021. In addition to unit growth, we are focused on driving consumers back to the stores with our great food and compelling value offers. We are also capturing off-premise demand with our hybrid delivery model and increasing network density. Leveraging our vast membership base and digital platform, we are more nimble than ever.”

 

Wat continued, “Despite the challenges posed by the pandemic, we are well-positioned to capture the market opportunities in China. Consumers love the delicious food and value-for-money that KFC and Pizza Hut offer. COFFii & JOY and Lavazza are also making good progress. Our digital platform and operational excellence help to enhance customer experience. We are committed and confident in achieving sustainable growth for many years to come.”

 

Andy Yeung, CFO of Yum China, added, “We achieved solid system sales and operating profit growth, both comparing to the prior year and to pre-pandemic 2019 levels, even though the recovery trajectory in the quarter was disrupted by the Delta variant outbreak

2


 

in southern China. On a two-year basis, Pizza Hut’s system sales growth returned to positive and KFC’s system sales grew an impressive 7% led by rapid new store openings. Our strong operating profit growth reflected operational excellence and continued improvement in operating efficiency.

 

Yeung continued, “With the lingering effects of the pandemic, we continue to expect full recovery of same-store sales to pre-pandemic 2019 levels to take time, with a recovery path that is nonlinear and uneven. We plan to invest more in marketing, value proposition and customer service to drive traffic. In addition, rising commodity prices will become a headwind and likely turn into inflationary pressure in the later part of this year. Recent wage increases will also put more pressure on the margins for the balance of the year. Nevertheless, we are committed to driving long-term returns for our shareholders. After careful deliberations that balanced the COVID-19 risks and our strong liquidity position, the Board of Directors has approved the resumption of share repurchases.”

 

Dividends and Share Repurchases

 

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 September 16, 2021 to shareholders of record as of the close of business on August 25, 2021.

 

The Board of Directors has approved the resumption of share repurchases.

 

Digital and Delivery

 

The KFC and Pizza Hut loyalty programs exceeded 330 million members combined as of quarter-end. Member sales accounted for approximately 61% of system sales in the second quarter of 2021.

 

Delivery contributed approximately 30% of KFC and Pizza Hut’s Company sales in the second quarter of 2021, an increase of approximately one percentage point from the prior year period as consumers are still cautious about dine-in.

 

Digital orders, including delivery, mobile orders and kiosk orders, accounted for approximately 85% of KFC and Pizza Hut’s Company sales in the second quarter of 2021.

KFC and Pizza Hut Total

 

Second Quarter

 

 

Year to Date Ended 6/30

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

        Member count (as of period-end)

 

330 million+

 

 

265 million+

 

 

330 million+

 

 

265 million+

 

        Member sales as % of system sales

 

~61%

 

 

~62%

 

 

~61%

 

 

~61%

 

        Delivery as % of Company sales

 

~30%

 

 

~29%

 

 

~31%

 

 

~32%

 

        Digital orders as % of Company sales

 

~85%

 

 

~80%

 

 

~85%

 

 

~80%

 

 

New-Unit Development and Asset Upgrade

 

The Company opened 404 new stores in the second quarter of 2021, mainly driven by development of the KFC brand and acceleration of the Pizza Hut brand.

 

The Company remodeled 316 stores in the second quarter of 2021.

 

New Units

 

 

 

Restaurant Count

 

 

 

 

Second Quarter

 

 

Year to Date

 

 

 

As of June 30

 

 

 

 

2021

 

 

Ended 6/30/2021

 

 

 

2021

 

 

2020

 

 

Yum China

 

 

404

 

 

 

719

 

 

 

 

11,023

 

 

 

9,954

 

 

   KFC

 

280

 

 

533

 

 

 

 

7,609

 

 

 

6,749

 

 

   Pizza Hut

 

64

 

 

108

 

 

 

 

2,425

 

 

 

2,258

 

 

   Others2

 

 

60

 

 

 

78

 

 

 

 

989

 

 

 

947

 

 

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

 

Restaurant Margin

 

Restaurant margin was 15.8% in the second quarter of 2021, compared with 13.7% in the prior year period, primarily attributable to improvement in sales, favorable commodity prices and higher productivity, partially offset by lower temporary relief provided by landlords and government agencies and wage inflation.

Second Quarter

 

 

 

Year to Date Ended 6/30

 

 

 

 

2021

 

 

2020

 

 

ppts change

 

 

 

2021

 

 

2020

 

 

ppts change

 

 

Yum China

 

 

15.8

%

 

 

13.7

%

 

 

+2.1

 

 

 

 

17.3

%

 

 

12.2

%

 

 

+5.1

 

 

   KFC

 

 

16.8

%

 

 

14.6

%

 

 

+2.2

 

 

 

 

18.4

%

 

 

14.1

%

 

 

+4.3

 

 

   Pizza Hut

 

 

13.1

%

 

 

11.2

%

 

 

+1.9

 

 

 

 

14.2

%

 

 

6.4

%

 

 

+7.8

 

 

 

 

 

3


 

 

2021 Outlook

The Company is updating the following fiscal year 2021 targets:

 

To open approximately 1,300 gross new stores, an increase compared to the original target of 1,000, primarily due to the acceleration of KFC and Pizza Hut store expansion.

 

To make capital expenditures of approximately $700-800 million, an increase compared to the original target of $600 million, as a result of additional new stores and stepped-up investment in infrastructure and digitalization.

 

Other Updates

 

On June 8, 2021, the Company announced that it has signed the Business Ambition for 1.5oC Commitment Letter, as part of the global Science Based Targets initiative (SBTi). In committing to the SBTi, the Company pledges to align its business with the most ambitious aim of the Paris Agreement, to limit global temperature rise to 1.5 oC above pre-industrial levels and reach net-zero global emissions by 2050. The Company will also disclose its climate impact through CDP.

 

On June 18, 2021, the Company issued its 2020 Sustainability Report, which highlights Yum China’s commitment to sustainability and provides an overview of progress made in 2020 towards its sustainability goals.

 

The Company will host a virtual Investor Day on Thursday, September 23, 2021 (Beijing/Hong Kong Time). A webcast will be available at Yum China’s Investor Relations website at http://ir.yumchina.com.

 

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.

 

 

Conference Call

Yum China’s management will hold an earnings conference call at 8:00 p.m. U.S. Eastern Time on Wednesday, July 28, 2021 (8:00 a.m. Beijing/Hong Kong Time on Thursday, July 29, 2021).  

 

A live webcast of the call may be accessed at https://edge.media-server.com/mmc/p/mn2iyycc.

 

To join by phone, 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/5196089

 

Conference ID:

5196089

 

A replay of the conference call will be available two hours after the call ends until 10:00 a.m. U.S. Eastern Time on Thursday, August 5, 2021 (10:00 p.m. Beijing/Hong Kong Time on Thursday, August 5, 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:

5196089

 

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

4


 

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, growth, 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 pandemic, the anticipated effects of our innovation, digital and delivery capabilities and investments 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 pandemic and regional resurgences, 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 “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 11,023 restaurants in over 1,500 cities at the end of June 2021. Yum China ranked # 363 on the Fortune 500 list and was named to TIME100 Most Influential Companies list in 2021. 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

5


 

 

Yum China Holdings, Inc.

Condensed Consolidated Statements of Income

(in US$ million, except per share data)

(unaudited)

 

 

Quarter Ended

 

 

% Change

 

Year to Date Ended

 

 

% Change

 

 

 

6/30/2021

 

 

6/30/2020

 

 

B/(W)

 

6/30/2021

 

 

6/30/2020

 

 

B/(W)

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Company sales

 

$

2,233

 

 

$

1,692

 

 

 

32

 

 

 

$

4,564

 

 

$

3,240

 

 

 

41

 

 

 

Franchise fees and income

 

 

38

 

 

 

37

 

 

 

4

 

 

 

 

80

 

 

 

72

 

 

 

11

 

 

 

Revenues from transactions with

   franchisees and unconsolidated affiliates

 

 

164

 

 

 

157

 

 

 

5

 

 

 

 

335

 

 

 

318

 

 

 

6

 

 

 

Other revenues

 

 

16

 

 

 

16

 

 

 

(1

)

 

 

 

29

 

 

 

26

 

 

 

11

 

 

 

Total revenues

 

 

2,451

 

 

 

1,902

 

 

 

29

 

 

 

 

5,008

 

 

 

3,656

 

 

 

37

 

 

 

Costs and Expenses, Net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Company restaurants

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Food and paper

 

 

686

 

 

 

556

 

 

 

(23

)

 

 

 

1,390

 

 

 

1,051

 

 

 

(32

)

 

 

Payroll and employee benefits

 

 

540

 

 

 

384

 

 

 

(41

)

 

 

 

1,084

 

 

 

778

 

 

 

(39

)

 

 

Occupancy and other operating expenses

 

 

653

 

 

 

521

 

 

 

(25

)

 

 

 

1,301

 

 

 

1,015

 

 

 

(28

)

 

 

Company restaurant expenses

 

 

1,879

 

 

 

1,461

 

 

 

(29

)

 

 

 

3,775

 

 

 

2,844

 

 

 

(33

)

 

 

General and administrative expenses

 

 

136

 

 

 

113

 

 

 

(19

)

 

 

 

266

 

 

 

212

 

 

 

(25

)

 

 

Franchise expenses

 

 

16

 

 

 

16

 

 

 

2

 

 

 

 

33

 

 

 

33

 

 

 

3

 

 

 

Expenses for transactions with

   franchisees and unconsolidated affiliates

 

 

160

 

 

 

160

 

 

 

 

 

 

 

329

 

 

 

316

 

 

 

(4

)

 

 

Other operating costs and expenses

 

 

13

 

 

 

13

 

 

 

(4

)

 

 

 

24

 

 

 

23

 

 

 

(5

)

 

 

Closures and impairment expenses, net

 

 

13

 

 

 

21

 

 

 

39

 

 

 

 

11

 

 

 

29

 

 

 

62

 

 

 

Other expenses (income), net

 

 

1

 

 

 

(10

)

 

NM

 

 

 

 

(5

)

 

 

(26

)

 

 

(82

)

 

 

Total costs and expenses, net

 

 

2,218

 

 

 

1,774

 

 

 

(25

)

 

 

 

4,433

 

 

 

3,431

 

 

 

(29

)

 

 

Operating Profit

 

 

233

 

 

 

128

 

 

 

83

 

 

 

 

575

 

 

 

225

 

 

 

156

 

 

 

Interest income, net

 

 

16

 

 

 

8

 

 

 

85

 

 

 

 

31

 

 

 

17

 

 

 

77

 

 

 

Investment gain (loss)

 

 

8

 

 

 

45

 

 

 

(83

)

 

 

 

(4

)

 

 

37

 

 

NM

 

 

 

Income Before Income Taxes

 

 

257

 

 

 

181

 

 

 

42

 

 

 

 

602

 

 

 

279

 

 

 

115

 

 

 

Income tax provision

 

 

(64

)

 

 

(45

)

 

 

(39

)

 

 

 

(166

)

 

 

(77

)

 

 

(113

)

 

 

Net income – including noncontrolling interests

 

 

193

 

 

 

136

 

 

 

42

 

 

 

 

436

 

 

 

202

 

 

 

116

 

 

 

Net income – noncontrolling interests

 

 

12

 

 

 

4

 

 

 

(229

)

 

 

 

25

 

 

 

8

 

 

 

(216

)

 

 

Net Income – Yum China Holdings, Inc.

 

$

181

 

 

$

132

 

 

 

37

 

 

 

$

411

 

 

$

194

 

 

 

112

 

 

 

Effective tax rate

 

 

24.8

%

 

 

25.2

%

 

 

0.4

 

ppts.

 

 

27.6

%

 

 

27.8

%

 

 

0.2

 

ppts.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic Earnings Per Common Share

 

$

0.43

 

 

$

0.35

 

 

 

 

 

 

 

$

0.98

 

 

$

0.51

 

 

 

 

 

 

 

Weighted-average shares outstanding

    (in millions)

 

 

421

 

 

 

377

 

 

 

 

 

 

 

 

420

 

 

 

376

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted Earnings Per Common Share

 

$

0.42

 

 

$

0.34

 

 

 

 

 

 

 

$

0.95

 

 

$

0.50

 

 

 

 

 

 

 

Weighted-average shares outstanding

    (in millions)

 

 

435

 

 

 

388

 

 

 

 

 

 

 

 

434

 

 

 

387

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash Dividends Declared Per Common Share

 

$

0.12

 

 

$

-

 

 

 

 

 

 

 

$

0.24

 

 

$

0.12

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Company sales

 

 

100.0

%

 

 

100.0

%

 

 

 

 

 

 

 

100.0

%

 

 

100.0

%

 

 

 

 

 

 

Food and paper

 

 

30.7

 

 

 

32.9

 

 

 

2.2

 

ppts.

 

 

30.5

 

 

 

32.4

 

 

 

1.9

 

ppts.

 

Payroll and employee benefits

 

 

24.2

 

 

 

22.7

 

 

 

(1.5

)

ppts.

 

 

23.8

 

 

 

24.0

 

 

 

0.2

 

ppts.

 

Occupancy and other operating expenses

 

 

29.3

 

 

 

30.7

 

 

 

1.4

 

ppts.

 

 

28.4

 

 

 

31.4

 

 

 

3.0

 

ppts.

 

Restaurant margin

 

 

15.8

%

 

 

13.7

%

 

 

2.1

 

ppts.

 

 

17.3

%

 

 

12.2

%

 

 

5.1

 

ppts.

 

Operating margin

 

 

10.4

%

 

 

7.5

%

 

 

2.9

 

ppts.

 

 

12.6

%

 

 

7.0

%

 

 

5.6

 

ppts.

 

 

Percentages may not recompute due to rounding.

6


 

Yum China Holdings, Inc.

KFC Operating Results

(in US$ million)

(unaudited)

 

 

Quarter Ended

 

 

% Change

 

Year to Date Ended

 

 

% Change

 

 

 

6/30/2021

 

 

6/30/2020

 

 

B/(W)

 

6/30/2021

 

 

6/30/2020

 

 

B/(W)

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Company sales

 

$

1,687

 

 

$

1,260

 

 

 

34

 

 

 

$

3,470

 

 

$

2,480

 

 

 

40

 

 

 

Franchise fees and income

 

 

30

 

 

 

32

 

 

 

(3

)

 

 

 

63

 

 

 

65

 

 

 

(2

)

 

 

Revenues from transactions with

   franchisees and unconsolidated affiliates

 

 

14

 

 

 

15

 

 

 

(5

)

 

 

 

29

 

 

 

31

 

 

 

(5

)

 

 

Other revenues

 

 

3

 

 

 

 

 

NM

 

 

 

 

4

 

 

 

 

 

NM

 

 

 

Total revenues

 

 

1,734

 

 

 

1,307

 

 

 

33

 

 

 

 

3,566

 

 

 

2,576

 

 

 

38

 

 

 

Costs and Expenses, Net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Company restaurants

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Food and paper

 

 

522

 

 

 

419

 

 

 

(25

)

 

 

 

1,062

 

 

 

811

 

 

 

(31

)

 

 

Payroll and employee benefits

 

 

391

 

 

 

271

 

 

 

(44

)

 

 

 

789

 

 

 

558

 

 

 

(42

)

 

 

Occupancy and other operating expenses

 

 

490

 

 

 

387

 

 

 

(27

)

 

 

 

980

 

 

 

762

 

 

 

(29

)

 

 

Company restaurant expenses

 

 

1,403

 

 

 

1,077

 

 

 

(30

)

 

 

 

2,831

 

 

 

2,131

 

 

 

(33

)

 

 

General and administrative expenses

 

 

58

 

 

 

42

 

 

 

(38

)

 

 

 

113

 

 

 

88

 

 

 

(28

)

 

 

Franchise expenses

 

 

15

 

 

 

16

 

 

 

2

 

 

 

 

31

 

 

 

32

 

 

 

3

 

 

 

Expenses for transactions with

   franchisees and unconsolidated affiliates

 

 

14

 

 

 

15

 

 

 

6

 

 

 

 

29

 

 

 

31

 

 

 

6

 

 

 

Other operating costs and expenses

 

 

1

 

 

 

 

 

NM

 

 

 

 

1

 

 

 

 

 

NM

 

 

 

Closures and impairment expenses, net

 

 

6

 

 

 

10

 

 

 

36

 

 

 

 

6

 

 

 

11

 

 

 

43

 

 

 

Other income, net

 

 

(3

)

 

 

(12

)

 

 

(76

)

 

 

 

(12

)

 

 

(29

)

 

 

(58

)

 

 

Total costs and expenses, net

 

 

1,494

 

 

 

1,148

 

 

 

(30

)

 

 

 

2,999

 

 

 

2,264

 

 

 

(33

)

 

 

Operating Profit

 

$

240

 

 

$

159

 

 

 

50

 

 

 

$

567

 

 

$

312

 

 

 

81

 

 

 

Company sales

 

 

100.0

%

 

 

100.0

%

 

 

 

 

 

 

 

100.0

%

 

 

100.0

%

 

 

 

 

 

 

Food and paper

 

 

30.9

 

 

 

33.3

 

 

 

2.4

 

ppts.

 

 

30.6

 

 

 

32.7

 

 

 

2.1

 

ppts.

 

Payroll and employee benefits

 

 

23.2

 

 

 

21.5

 

 

 

(1.7

)

ppts.

 

 

22.7

 

 

 

22.5

 

 

 

(0.2

)

ppts.

 

Occupancy and other operating expenses

 

 

29.1

 

 

 

30.6

 

 

 

1.5

 

ppts.

 

 

28.3

 

 

 

30.7

 

 

 

2.4

 

ppts.

 

Restaurant margin

 

 

16.8

%

 

 

14.6

%

 

 

2.2

 

ppts.

 

 

18.4

%

 

 

14.1

%

 

 

4.3

 

ppts.

 

Operating margin

 

 

14.2

%

 

 

12.6

%

 

 

1.6

 

ppts.

 

 

16.3

%

 

 

12.6

%

 

 

3.7

 

ppts.

 

 

Percentages may not recompute due to rounding.

7


 

Yum China Holdings, Inc.

Pizza Hut Operating Results

(in US$ million)

(unaudited)

 

 

Quarter Ended

 

 

% Change

 

Year to Date Ended

 

 

% Change

 

 

 

6/30/2021

 

 

6/30/2020

 

 

B/(W)

 

6/30/2021

 

 

6/30/2020

 

 

B/(W)

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Company sales

 

$

533

 

 

$

422

 

 

 

26

 

 

 

$

1,071

 

 

$

744

 

 

 

44

 

 

 

Franchise fees and income

 

 

2

 

 

 

1

 

 

 

32

 

 

 

 

4

 

 

 

2

 

 

 

56

 

 

 

Revenues from transactions with

   franchisees and unconsolidated affiliates

 

 

2

 

 

 

1

 

 

 

76

 

 

 

 

3

 

 

 

2

 

 

 

83

 

 

 

Other revenues

 

 

1

 

 

 

 

 

NM

 

 

 

 

1

 

 

 

 

 

NM

 

 

 

Total revenues

 

 

538

 

 

 

424

 

 

 

26

 

 

 

 

1,079

 

 

 

748

 

 

 

44

 

 

 

Costs and Expenses, Net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Company restaurants

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Food and paper

 

 

160

 

 

 

134

 

 

 

(20

)

 

 

 

320

 

 

 

236

 

 

 

(36

)

 

 

Payroll and employee benefits

 

 

146

 

 

 

111

 

 

 

(32

)

 

 

 

289

 

 

 

215

 

 

 

(34

)

 

 

Occupancy and other operating expenses

 

 

157

 

 

 

130

 

 

 

(20

)

 

 

 

310

 

 

 

245

 

 

 

(26

)

 

 

Company restaurant expenses

 

 

463

 

 

 

375

 

 

 

(24

)

 

 

 

919

 

 

 

696

 

 

 

(32

)

 

 

General and administrative expenses

 

 

28

 

 

 

23

 

 

 

(19

)

 

 

 

53

 

 

 

47

 

 

 

(12

)

 

 

Franchise expenses

 

 

1

 

 

 

 

 

 

(32

)

 

 

 

2

 

 

 

1

 

 

 

(35

)

 

 

Expenses for transactions with

   franchisees and unconsolidated affiliates

 

 

2

 

 

 

1

 

 

 

(72

)

 

 

 

3

 

 

 

2

 

 

 

(73

)

 

 

Closures and impairment expenses, net

 

 

5

 

 

 

10

 

 

 

49

 

 

 

 

3

 

 

 

15

 

 

 

79

 

 

 

Total costs and expenses, net

 

 

499

 

 

 

409

 

 

 

(22

)

 

 

 

980

 

 

 

761

 

 

 

(29

)

 

 

Operating Profit (Loss)

 

$

39

 

 

$

15

 

 

 

151

 

 

 

$

99

 

 

$

(13

)

 

NM

 

 

 

Company sales

 

 

100.0

%

 

 

100.0

%

 

 

 

 

 

 

 

100.0

%

 

 

100.0

%

 

 

 

 

 

 

Food and paper

 

 

30.1

 

 

 

31.8

 

 

 

1.7

 

ppts.

 

 

29.9

 

 

 

31.7

 

 

 

1.8

 

ppts.

 

Payroll and employee benefits

 

 

27.4

 

 

 

26.1

 

 

 

(1.3

)

ppts.

 

 

26.9

 

 

 

28.8

 

 

 

1.9

 

ppts.

 

Occupancy and other operating expenses

 

 

29.4

 

 

 

30.9

 

 

 

1.5

 

ppts.

 

 

29.0

 

 

 

33.1

 

 

 

4.1

 

ppts.

 

Restaurant margin

 

 

13.1

%

 

 

11.2

%

 

 

1.9

 

ppts.

 

 

14.2

%

 

 

6.4

%

 

 

7.8

 

ppts.

 

Operating margin

 

 

7.2

%

 

 

3.6

%

 

 

3.6

 

ppts.

 

 

9.2

%

 

 

(1.7

)%

 

 

10.9

 

ppts.

 

 

Percentages may not recompute due to rounding.

8


 

Yum China Holdings, Inc.

Condensed Consolidated Balance Sheets

(in US$ million)

 

 

6/30/2021

 

 

12/31/2020

 

 

 

(Unaudited)

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

Current Assets

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

1,209

 

 

$

1,158

 

Short-term investments

 

 

3,139

 

 

 

3,105

 

Accounts receivable, net

 

 

105

 

 

 

99

 

Inventories, net

 

 

380

 

 

 

398

 

Prepaid expenses and other current assets

 

 

207

 

 

 

176

 

Total Current Assets

 

 

5,040

 

 

 

4,936

 

Property, plant and equipment, net

 

 

1,822

 

 

 

1,765

 

Operating lease right-of-use assets

 

 

2,205

 

 

 

2,164

 

Goodwill

 

 

841

 

 

 

832

 

Intangible assets, net

 

 

228

 

 

 

246

 

Deferred income tax assets

 

 

73

 

 

 

98

 

Investments in unconsolidated affiliates

 

 

301

 

 

 

85

 

Other assets

 

 

794

 

 

 

749

 

Total Assets

 

 

11,304

 

 

 

10,875

 

 

 

 

 

 

 

 

 

 

LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST AND EQUITY

 

 

 

 

 

 

 

 

Current Liabilities

 

 

 

 

 

 

 

 

Accounts payable and other current liabilities

 

 

2,042

 

 

 

1,995

 

Income taxes payable

 

 

74

 

 

 

72

 

Total Current Liabilities

 

 

2,116

 

 

 

2,067

 

Non-current operating lease liabilities

 

 

1,941

 

 

 

1,915

 

Non-current finance lease obligations

 

 

28

 

 

 

28

 

Deferred income tax liabilities

 

 

232

 

 

 

227

 

Other liabilities

 

 

159

 

 

 

167

 

Total Liabilities

 

 

4,476

 

 

 

4,404

 

 

 

 

 

 

 

 

 

 

Redeemable Noncontrolling Interest

 

 

12

 

 

 

12

 

 

 

 

 

 

 

 

 

 

Equity

 

 

 

 

 

 

 

 

Common stock,  $0.01 par value; 1,000 million shares authorized; 441 million shares and

     440 million shares issued at June 30, 2021 and December 31, 2020, respectively; 421 million shares and 420 million shares outstanding at June 30, 2021 and December 31, 2020, respectively

 

 

4

 

 

 

4

 

Treasury stock

 

 

(728

)

 

 

(728

)

Additional paid-in capital

 

 

4,679

 

 

 

4,658

 

Retained earnings

 

 

2,415

 

 

 

2,105

 

Accumulated other comprehensive income

 

 

205

 

 

 

167

 

Total Yum China Holdings, Inc. Stockholders' Equity

 

 

6,575

 

 

 

6,206

 

Noncontrolling interests

 

 

241

 

 

 

253

 

Total Equity

 

 

6,816

 

 

 

6,459

 

Total Liabilities, Redeemable Noncontrolling Interest and Equity

 

$

11,304

 

 

$

10,875

 

 

 

 

 

 

 

 

 

 

9


 

 

Yum China Holdings, Inc.

Condensed Consolidated Statements of Cash Flows

(in US$ million)

(unaudited)

 

 

 

 

Year to Date Ended

 

 

 

 

6/30/2021

 

6/30/2020

Cash Flows – Operating Activities

 

 

 

 

 

 

 

 

 

 

 

Net income – including noncontrolling interests

 

 

$

436

 

 

 

$

202

 

 

Depreciation and amortization

 

 

 

252

 

 

 

 

214

 

 

Non-cash operating lease cost

 

 

 

204

 

 

 

 

178

 

 

Closures and impairment expenses

 

 

 

11

 

 

 

 

29

 

 

Investment loss (gain)

 

 

 

4

 

 

 

 

(37

)

 

Equity income from investments in unconsolidated affiliates

 

 

 

(27

)

 

 

 

(34

)

 

Distributions of income received from unconsolidated affiliates

 

 

 

21

 

 

 

 

25

 

 

Deferred income taxes

 

 

 

29

 

 

 

 

6

 

 

Share-based compensation expense

 

 

 

25

 

 

 

 

17

 

 

Changes in accounts receivable

 

 

 

(5

)

 

 

 

6

 

 

Changes in inventories

 

 

 

22

 

 

 

 

35

 

 

Changes in prepaid expenses and other current assets

 

 

 

8

 

 

 

 

17

 

 

Changes in accounts payable and other current liabilities

 

 

 

16

 

 

 

 

(16

)

 

Changes in income taxes payable

 

 

 

1

 

 

 

 

17

 

 

Changes in non-current operating lease liabilities

 

 

 

(204

)

 

 

 

(194

)

 

Other, net

 

 

 

(20

)

 

 

 

(13

)

 

Net Cash Provided by Operating Activities

 

 

 

773

 

 

 

 

452

 

 

Cash Flows – Investing Activities

 

 

 

 

 

 

 

 

 

 

 

Capital spending

 

 

 

(303

)

 

 

 

(185

)

 

Purchases of short-term investments

 

 

 

(2,824

)

 

 

 

(1,093

)

 

Purchase of long-term time deposits

 

 

 

(25

)

 

 

 

(57

)

 

Maturities of short-term investments

 

 

 

2,801

 

 

 

 

662

 

 

Contribution to unconsolidated affiliates

 

 

 

 

 

 

 

(13

)

 

Acquisition of business, net of cash acquired

 

 

 

 

 

 

 

(177

)

 

Investment in equity securities

 

 

 

(261

)

 

 

 

 

 

Disposal of equity securities

 

 

 

 

 

 

 

54

 

 

Other, net

 

 

 

1

 

 

 

 

48

 

 

Net Cash Used in Investing Activities

 

 

 

(611

)

 

 

 

(761

)

 

Cash Flows – Financing Activities

 

 

 

 

 

 

 

 

 

 

 

Repurchase of shares of common stock

 

 

 

 

 

 

 

(8

)

 

Cash dividends paid on common stock

 

 

 

(101

)

 

 

 

(45

)

 

Dividends paid to noncontrolling interests

 

 

 

(14

)

 

 

 

(7

)

 

Other, net

 

 

 

(4

)

 

 

 

1

 

 

Net Cash Used in Financing Activities

 

 

 

(119

)

 

 

 

(59

)

 

Effect of Exchange Rates on Cash, Cash Equivalents and Restricted Cash

 

 

 

8

 

 

 

 

(6

)

 

Net Increase (Decrease) in Cash, Cash Equivalents and Restricted Cash

 

 

 

51

 

 

 

 

(374

)

 

Cash, Cash Equivalents, and Restricted Cash - Beginning of Period

 

 

 

1,158

 

 

 

 

1,055

 

 

Cash, Cash Equivalents, and Restricted Cash - End of Period

 

 

$

1,209

 

 

 

$

681

 

 

 


10


 

 

In this press release:

 

The Company provides certain percentage changes excluding the impact of foreign currency translation (“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 restaurant 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 an average rate of approximately 6% of system sales. Franchise and unconsolidated affiliate restaurant sales are not included in Company sales in the Condensed Consolidated 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.

 

Effective January 1, 2018, the Company revised its definition of same-store sales growth to represent the estimated percentage change in sales of food of all restaurants in the Company system that have been open prior to the first day of our prior fiscal year, excluding the period during which stores are temporarily closed. We refer to these as our "base" stores. Previously, same-store sales growth represented the estimated percentage change in sales of all restaurants in the Company system that have been open for one year or more, including stores temporarily closed, and the base stores changed on a rolling basis from month to month. This revision was made to align with how management measures performance internally and focuses on trends of a more stable base of stores.

 

Company sales represent revenues from Company-owned restaurants. 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.

 

11


 

 

Reconciliation of Reported GAAP Results to Non-GAAP Adjusted Measures

(in millions, except per share data)

(unaudited)

 

In addition to the results provided in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”) in this press release, the Company provides non-GAAP measures adjusted for Special Items, which include Adjusted Operating Profit, Adjusted Net Income, Adjusted Earnings Per Common Share ("EPS"), Adjusted Effective Tax Rate and Adjusted EBITDA, which we define as net income including noncontrolling interests adjusted for income tax, interest income, net, investment gain or loss, certain non-cash expenses, consisting of depreciation and amortization as well as store impairment charges, and Special Items.

 

The following table set forth the reconciliation of the most directly comparable GAAP financial measures to the non-GAAP adjusted financial measures.

 

 

Quarter Ended

 

 

Year to Date Ended

 

 

 

 

6/30/2021

 

 

6/30/2020

 

 

6/30/2021

 

 

6/30/2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP Reconciliations

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of Operating Profit to Adjusted Operating Profit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Profit

 

$

233

 

 

$

128

 

 

$

575

 

 

$

225

 

 

Special Items, Operating Profit

 

 

(4

)

 

 

(4

)

 

 

(7

)

 

 

(5

)

 

Adjusted Operating Profit

 

$

237

 

 

$

132

 

 

$

582

 

 

$

230

 

 

Reconciliation of Net Income to Adjusted Net Income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income – Yum China Holdings, Inc.

 

$

181

 

 

$

132

 

 

$

411

 

 

$

194

 

 

Special Items, Net Income –Yum China Holdings, Inc.

 

 

(4

)

 

 

(4

)

 

 

(7

)

 

 

(5

)

 

Adjusted Net Income – Yum China Holdings, Inc.

 

$

185

 

 

$

136

 

 

$

418

 

 

$

199

 

 

Reconciliation of EPS to Adjusted EPS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic Earnings Per Common Share

 

$

0.43

 

 

$

0.35

 

 

$

0.98

 

 

$

0.51

 

 

Special Items, Basic Earnings Per Common Share

 

 

(0.01

)

 

 

(0.01

)

 

 

(0.01

)

 

 

(0.02

)

 

Adjusted Basic Earnings Per Common Share

 

$

0.44

 

 

$

0.36

 

 

$

0.99

 

 

$

0.53

 

 

Diluted Earnings Per Common Share

 

$

0.42

 

 

$

0.34

 

 

$

0.95

 

 

$

0.50

 

 

Special Items, Diluted Earnings Per Common Share

 

 

 

 

 

(0.01

)

 

 

(0.01

)

 

 

(0.01

)

 

Adjusted Diluted Earnings Per Common Share

 

$

0.42

 

 

$

0.35

 

 

$

0.96

 

 

$

0.51

 

 

Reconciliation of Effective Tax Rate to Adjusted Effective Tax Rate

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Effective tax rate

 

 

24.8

%

 

 

25.2

%

 

 

27.6

%

 

 

27.8

%

 

Impact on effective tax rate as a result of Special Items

 

 

0.3

%

 

 

0.6

%

 

 

0.4

%

 

 

0.5

%

 

Adjusted effective tax rate

 

 

24.5

%

 

 

24.6

%

 

 

27.2

%

 

 

27.3

%

 

 

Net income, along with the reconciliation to Adjusted EBITDA, is presented below:

 

 

Quarter Ended

 

 

Year to Date Ended

 

 

 

 

6/30/2021

 

 

6/30/2020

 

 

6/30/2021

 

 

6/30/2020

 

 

Reconciliation of Net Income to Adjusted EBITDA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income – Yum China Holdings, Inc.

 

$

181

 

 

$

132

 

 

$

411

 

 

$

194

 

 

Net income – noncontrolling interests

 

 

12

 

 

 

4

 

 

 

25

 

 

 

8

 

 

Income tax provision

 

 

64

 

 

 

45

 

 

 

166

 

 

 

77

 

 

Interest income, net

 

 

(16

)

 

 

(8

)

 

 

(31

)

 

 

(17

)

 

Investment (gain) loss

 

 

(8

)

 

 

(45

)

 

 

4

 

 

 

(37

)

 

Operating Profit

 

 

233

 

 

 

128

 

 

 

575

 

 

 

225

 

 

Special Items, Operating Profit

 

 

4

 

 

 

4

 

 

 

7

 

 

 

5

 

 

Adjusted Operating Profit

 

 

237

 

 

 

132

 

 

 

582

 

 

 

230

 

 

Depreciation and amortization

 

 

124

 

 

 

105

 

 

 

252

 

 

 

214

 

 

Store impairment charges

 

 

16

 

 

 

24

 

 

 

19

 

 

 

36

 

 

Adjusted EBITDA

 

$

377

 

 

$

261

 

 

$

853

 

 

$

480

 

 

12


 

 

 

 

 

 

Details of Special Items are presented below:

 

Quarter Ended

 

 

Year to Date Ended

 

 

 

 

6/30/2021

 

 

6/30/2020

 

 

6/30/2021

 

 

6/30/2020

 

 

Share-based compensation expense for Partner PSU awards(1)

 

$

(4

)

 

$

(1

)

 

$

(7

)

 

$

(2

)

 

Derecognition of indemnification assets related to Daojia(2)

 

 

 

 

 

(3

)

 

 

 

 

 

(3

)

 

Special Items, Operating Profit

 

 

(4

)

 

 

(4

)

 

 

(7

)

 

 

(5

)

 

Tax effect on Special Items(3)

 

 

 

 

 

 

 

 

 

 

 

 

 

Special Items, net income – including noncontrolling interests

 

 

(4

)

 

 

(4

)

 

 

(7

)

 

 

(5

)

 

Special Items, net income – noncontrolling interests

 

 

 

 

 

 

 

 

 

 

 

 

 

Special Items, Net Income –Yum China Holdings, Inc.

 

$

(4

)

 

$

(4

)

 

$

(7

)

 

$

(5

)

 

Weighted-average Diluted Shares Outstanding (in millions)

 

 

435

 

 

 

388

 

 

 

434

 

 

 

387

 

 

Special Items, Diluted Earnings Per Common Share

 

$

 

 

$

(0.01

)

 

$

(0.01

)

 

$

(0.01

)

 

 

 

(1)

In February 2020, the Company granted Partner PSU Awards to select employees who were deemed critical to the Company’s execution of its strategic operating plan. These PSU awards will only vest if threshold performance goals are achieved over a four-year performance period, with the payout ranging from 0% to 200% of the target number of shares subject to the PSU awards. Partner PSU Awards were granted to address increased competition for executive talent, motivate transformational performance and encourage management retention. Given the unique nature of these grants, the Compensation Committee does not intend to grant similar, special grants to the same employees during the performance period. The impact from these special awards is excluded from metrics that management uses to assess the Company’s performance. The Company recognized share-based compensation cost of $4 million and $7 million associated with the Partner PSU Awards for the quarter and year to date ended June 30, 2021, respectively, and $1 million and $2 million for the quarter and year to date ended June 30, 2020, respectively.

(2)

In the quarter ended June 30, 2020, the Company derecognized a $3 million indemnification asset previously recorded for the Daojia acquisition as the indemnification right expired pursuant to the purchase agreement. The amount was included in Other income, net, but was not allocated to any segment for performance reporting purposes.

(3)

The tax expense was determined based upon the nature, as well as the jurisdiction, of each Special Item at the applicable tax rate.


13


 

 

 

The Company excludes impact from Special Items for the purpose of evaluating performance internally. Special Items are not included in any of our segment results. In addition, the Company provides Adjusted EBITDA because we believe that investors and analysts may find it useful in measuring operating performance without regard to items such as income tax, interest income, net, investment gain or loss, depreciation and amortization, store impairment charges, and Special Items. Store impairment charges included as an adjustment item in Adjusted EBITDA primarily resulted from our semi-annual impairment evaluation of long-lived assets of individual restaurants, and additional impairment evaluation whenever events or changes in circumstances indicate that the carrying value of the assets may not be recoverable. If these restaurant-level assets were not impaired, depreciation of the assets would have been recorded and included in EBITDA. Therefore, store impairment charges were a non-cash item similar to depreciation and amortization of our long-lived assets of restaurants. The Company believes that investors and analyst may find it useful in measuring operating performance without regard to such non-cash item.

 

These adjusted measures are not intended to replace the presentation of our financial results in accordance with GAAP.  Rather, the Company believes that the presentation of these adjusted measures provides additional information to investors to facilitate the comparison of past and present results, excluding those items that the Company does not believe are indicative of our ongoing operations due to their nature.  

 

14


 

 

Unit Count by Brand

 

KFC

 

 

12/31/2020

 

 

New Builds

 

 

Closures

 

 

Refranchised

 

 

Acquired

 

 

6/30/2021

 

Company-owned

 

 

5,872

 

 

 

410

 

 

 

(76

)

 

 

(1

)

 

 

2

 

 

 

6,207

 

Unconsolidated affiliates

 

 

677

 

 

 

69

 

 

 

(6

)

 

 

 

 

 

 

 

 

740

 

Franchisees

 

 

617

 

 

 

54

 

 

 

(8

)

 

 

1

 

 

 

(2

)

 

 

662

 

Total

 

 

7,166

 

 

 

533

 

 

 

(90

)

 

 

 

 

 

 

 

 

7,609

 

 

Pizza Hut

 

 

12/31/2020

 

 

New Builds

 

 

Closures

 

 

6/30/2021

 

Company-owned

 

 

2,230

 

 

 

104

 

 

 

(36

)

 

 

2,298

 

Franchisees

 

 

125

 

 

 

4

 

 

 

(2

)

 

 

127

 

Total

 

 

2,355

 

 

 

108

 

 

 

(38

)

 

 

2,425

 

 

Others

 

 

12/31/2020

 

 

New Builds

 

 

Closures

 

 

6/30/2021

 

Company-owned

 

 

88

 

 

 

9

 

 

 

(8

)

 

 

89

 

Unconsolidated affiliates

 

 

4

 

 

 

10

 

 

 

 

 

 

14

 

Franchisees

 

 

893

 

 

 

59

 

 

 

(66

)

 

 

886

 

Total

 

 

985

 

 

 

78

 

 

 

(74

)

 

 

989

 

 

 

 

15


 

 

Yum China Holdings, Inc.

Segment Results

(in US$ million)

(unaudited)

 

Quarter Ended 6/30/2021

 

KFC

 

 

Pizza Hut

 

 

All Other Segments

 

 

Corporate

and

Unallocated(1)

 

 

Elimination

 

 

Total

 

Company sales

 

$

1,687

 

 

$

533

 

 

$

13

 

 

$

 

 

$

 

 

$

2,233

 

Franchise fees and income

 

 

30

 

 

 

2

 

 

 

6

 

 

 

 

 

 

 

 

 

38

 

Revenues from transactions with

   franchisees and unconsolidated affiliates(2)

 

 

14

 

 

 

2

 

 

 

23

 

 

 

125

 

 

 

 

 

 

164

 

Other revenues

 

 

3

 

 

 

1

 

 

 

64

 

 

 

2

 

 

 

(54

)

 

 

16

 

Total revenues

 

$

1,734

 

 

$

538

 

 

$

106

 

 

$

127

 

 

$

(54

)

 

$

2,451

 

Company restaurant expenses

 

 

1,403

 

 

 

463

 

 

 

14

 

 

 

 

 

 

(1

)

 

 

1,879

 

General and administrative expenses

 

 

58

 

 

 

28

 

 

 

10

 

 

 

40

 

 

 

 

 

 

136

 

Franchise expenses

 

 

15

 

 

 

1

 

 

 

 

 

 

 

 

 

 

 

 

16

 

Expenses for transactions with

  franchisees and unconsolidated affiliates(2)

 

 

14

 

 

 

2

 

 

 

21

 

 

 

123

 

 

 

 

 

 

160

 

Other operating costs and expenses

 

 

1

 

 

 

 

 

 

63

 

 

 

2

 

 

 

(53

)

 

 

13

 

Closures and impairment expenses, net

 

 

6

 

 

 

5

 

 

 

2

 

 

 

 

 

 

 

 

 

13

 

Other (income) expenses, net

 

 

(3

)

 

 

 

 

 

2

 

 

 

2

 

 

 

 

 

 

1

 

Total costs and expenses, net

 

 

1,494

 

 

 

499

 

 

 

112

 

 

 

167

 

 

 

(54

)

 

 

2,218

 

Operating Profit (Loss)

 

$

240

 

 

$

39

 

 

$

(6

)

 

$

(40

)

 

$

 

 

$

233

 

 

Quarter Ended 6/30/2020

 

KFC

 

 

Pizza Hut

 

 

All Other Segments

 

 

Corporate

and

Unallocated(1)

 

 

Elimination

 

 

Total

 

Company sales

 

$

1,260

 

 

$

422

 

 

$

10

 

 

$

 

 

$

 

 

$

1,692

 

Franchise fees and income

 

 

32

 

 

 

1

 

 

 

4

 

 

 

 

 

 

 

 

 

37

 

Revenues from transactions with

   franchisees and unconsolidated affiliates(2)

 

 

15

 

 

 

1

 

 

 

11

 

 

 

130

 

 

 

 

 

 

157

 

Other revenues

 

 

 

 

 

 

 

 

25

 

 

 

1

 

 

 

(10

)

 

 

16

 

Total revenues

 

$

1,307

 

 

$

424

 

 

$

50

 

 

$

131

 

 

$

(10

)

 

$

1,902

 

Company restaurant expenses

 

 

1,077

 

 

 

375

 

 

 

10

 

 

 

 

 

 

(1

)

 

 

1,461

 

General and administrative expenses

 

 

42

 

 

 

23

 

 

 

11

 

 

 

37

 

 

 

 

 

 

113

 

Franchise expenses

 

 

16

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

16

 

Expenses for transactions with

  franchisees and unconsolidated affiliates(2)

 

 

15

 

 

 

1

 

 

 

9

 

 

 

135

 

 

 

 

 

 

160

 

Other operating costs and expenses

 

 

 

 

 

 

 

 

21

 

 

 

1

 

 

 

(9

)

 

 

13

 

Closures and impairment expenses, net

 

 

10

 

 

 

10

 

 

 

1

 

 

 

 

 

 

 

 

 

21

 

Other (income) expenses, net

 

 

(12

)

 

 

 

 

 

 

 

 

2

 

 

 

 

 

 

(10

)

Total costs and expenses, net

 

 

1,148

 

 

 

409

 

 

 

52

 

 

 

175

 

 

 

(10

)

 

 

1,774

 

Operating Profit (Loss)

 

$

159

 

 

$

15

 

 

$

(2

)

 

$

(44

)

 

$

 

 

$

128

 

 

16


 

 

Year to Date Ended 6/30/2021

 

KFC

 

 

Pizza Hut

 

 

All Other Segments

 

 

Corporate

and

Unallocated(1)

 

 

Elimination

 

 

Total

 

Company sales

 

$

3,470

 

 

$

1,071

 

 

$

23

 

 

$

 

 

$

 

 

$

4,564

 

Franchise fees and income

 

 

63

 

 

 

4

 

 

 

13

 

 

 

 

 

 

 

 

 

80

 

Revenues from transactions with

   franchisees and unconsolidated affiliates(2)

 

 

29

 

 

 

3

 

 

 

49

 

 

 

254

 

 

 

 

 

 

335

 

Other revenues

 

 

4

 

 

 

1

 

 

 

99

 

 

 

4

 

 

 

(79

)

 

 

29

 

Total revenues

 

$

3,566

 

 

$

1,079

 

 

$

184

 

 

$

258

 

 

$

(79

)

 

$

5,008

 

Company restaurant expenses

 

 

2,831

 

 

 

919

 

 

 

26

 

 

 

 

 

 

(1

)

 

 

3,775

 

General and administrative expenses

 

 

113

 

 

 

53

 

 

 

19

 

 

 

81

 

 

 

 

 

 

266

 

Franchise expenses

 

 

31

 

 

 

2

 

 

 

 

 

 

 

 

 

 

 

 

33

 

Expenses for transactions with

  franchisees and unconsolidated affiliates(2)

 

 

29

 

 

 

3

 

 

 

45

 

 

 

252

 

 

 

 

 

 

329

 

Other operating costs and expenses

 

 

1

 

 

 

 

 

 

96

 

 

 

5

 

 

 

(78

)

 

 

24

 

Closures and impairment expenses, net

 

 

6

 

 

 

3

 

 

 

2

 

 

 

 

 

 

 

 

 

11

 

Other (income) expenses, net

 

 

(12

)

 

 

 

 

 

5

 

 

 

2

 

 

 

 

 

 

(5

)

Total costs and expenses, net

 

 

2,999

 

 

 

980

 

 

 

193

 

 

 

340

 

 

 

(79

)

 

 

4,433

 

Operating Profit (Loss)

 

$

567

 

 

$

99

 

 

$

(9

)

 

$

(82

)

 

$

 

 

$

575

 

 

Year to Date Ended 6/30/2020

 

KFC

 

 

Pizza Hut

 

 

All Other Segments

 

 

Corporate

and

Unallocated(1)

 

 

Elimination

 

 

Total

 

Company sales

 

$

2,480

 

 

$

744

 

 

$

16

 

 

$

 

 

$

 

 

$

3,240

 

Franchise fees and income

 

 

65

 

 

 

2

 

 

 

5

 

 

 

 

 

 

 

 

 

72

 

Revenues from transactions with

   franchisees and unconsolidated affiliates(2)

 

 

31

 

 

 

2

 

 

 

16

 

 

 

269

 

 

 

 

 

 

318

 

Other revenues

 

 

 

 

 

 

 

 

41

 

 

 

2

 

 

 

(17

)

 

 

26

 

Total revenues

 

$

2,576

 

 

$

748

 

 

$

78

 

 

$

271

 

 

$

(17

)

 

$

3,656

 

Company restaurant expenses

 

 

2,131

 

 

 

696

 

 

 

19

 

 

 

 

 

 

(2

)

 

 

2,844

 

General and administrative expenses

 

 

88

 

 

 

47

 

 

 

19

 

 

 

58

 

 

 

 

 

 

212

 

Franchise expenses

 

 

32

 

 

 

1

 

 

 

 

 

 

 

 

 

 

 

 

33

 

Expenses for transactions with

  franchisees and unconsolidated affiliates(2)

 

 

31

 

 

 

2

 

 

 

13

 

 

 

270

 

 

 

 

 

 

316

 

Other operating costs and expenses

 

 

 

 

 

 

 

 

36

 

 

 

2

 

 

 

(15

)

 

 

23

 

Closures and impairment expenses, net

 

 

11

 

 

 

15

 

 

 

3

 

 

 

 

 

 

 

 

 

29

 

Other (income) expenses, net

 

 

(29

)

 

 

 

 

 

 

 

 

3

 

 

 

 

 

 

(26

)

Total costs and expenses, net

 

 

2,264

 

 

 

761

 

 

 

90

 

 

 

333

 

 

 

(17

)

 

 

3,431

 

Operating Profit (Loss)

 

$

312

 

 

$

(13

)

 

$

(12

)

 

$

(62

)

 

$

 

 

$

225

 

The above tables reconcile segment information, which is based on management responsibility, with our Condensed Consolidated Statements of Income.  

 

(1)

Amounts have not been allocated to any segment for purpose of making operating decision or assessing financial performance as the transactions are deemed corporate revenues and expenses in nature.

(2)

Primarily includes revenues and associated expenses of transactions with franchisees and unconsolidated affiliates derived from the Company’s central procurement model whereby the Company centrally purchases substantially all food and paper products from suppliers and then sells and delivers to KFC and Pizza Hut restaurants, including franchisees and unconsolidated affiliates.

17

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Document and entity information table. Document And Entity Information [Table] Document And Entity Information [Table] Entity Addresses, Address Type Entity Addresses Address Type [Axis] Address Type Address Type [Domain] Other Address [Member] Other Address [Member] Document And Entity Information [Line Items] Document And Entity Information [Line Items] Document Type Document Type Amendment Flag Amendment Flag Document Period End Date Document Period End Date Entity Registrant Name Entity Registrant Name Entity Central Index Key Entity Emerging Growth Company Entity Emerging Growth Company Entity File Number Entity File Number Entity Incorporation, State or Country Code Entity Incorporation State Country Code Entity Tax Identification Number Entity Tax Identification Number Entity Address, Address Line One Entity Address Address Line1 Entity Address, Address Line Two Entity Address Address Line2 Entity Address, City or Town Entity Address City Or Town Entity Address, State or Province Entity Address State Or Province Entity Address, Country Entity Address Country Entity Address, Postal Zip Code Entity Address Postal Zip Code City Area Code City Area Code Local Phone Number Local Phone Number Written Communications Written Communications Soliciting Material Soliciting Material Pre-commencement Tender Offer Pre Commencement Tender Offer Pre-commencement Issuer Tender Offer Pre Commencement Issuer Tender Offer Title of each class Security12b Title Trading Symbol Trading Symbol Name of each exchange on which registered Security Exchange Name EX-101.PRE 7 yumc-20210728_pre.xml XBRL TAXONOMY EXTENSION PRESENTATION LINKBASE XML 8 yumc-8k_20210728_htm.xml IDEA: XBRL DOCUMENT 0001673358 2021-07-28 2021-07-28 0001673358 dei:OtherAddressMember 2021-07-28 2021-07-28 false 0001673358 8-K 2021-07-28 Yum China Holdings, Inc. DE 001-37762 81-2421743 7100 Corporate Drive Plano TX 75024 US Yum China Building 20 Tian Yao Qiao Road Shanghai 200030 CN (469)  980-2898 false false false false Common Stock, par value $0.01 per share YUMC NYSE false XML 9 R1.htm IDEA: XBRL DOCUMENT v3.21.2
Document And Entity Information
Jul. 28, 2021
Document And Entity Information [Line Items]  
Document Type 8-K
Amendment Flag false
Document Period End Date Jul. 28, 2021
Entity Registrant Name Yum China Holdings, Inc.
Entity Central Index Key 0001673358
Entity Emerging Growth Company false
Entity File Number 001-37762
Entity Incorporation, State or Country Code DE
Entity Tax Identification Number 81-2421743
Entity Address, Address Line One 7100 Corporate Drive
Entity Address, City or Town Plano
Entity Address, State or Province TX
Entity Address, Country US
Entity Address, Postal Zip Code 75024
City Area Code (469) 
Local Phone Number 980-2898
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Title of each class Common Stock, par value $0.01 per share
Trading Symbol YUMC
Name of each exchange on which registered NYSE
Other Address [Member]  
Document And Entity Information [Line Items]  
Entity Address, Address Line One Yum China Building
Entity Address, Address Line Two 20 Tian Yao Qiao Road
Entity Address, City or Town Shanghai
Entity Address, Country CN
Entity Address, Postal Zip Code 200030
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