Yum! Brands, Inc. · NYSE:YUM
Yum! Brands — Investor Day (December 2018)
143 slides from Yum! Brands's investor day presentation, Dec 5, 2018
Slide 1: Yum! Opening Video
Yum! Opening Video
Slide 2: Keith Siegner
Keith Siegner VP, Investor Relations, Corporate Strategy and Treasurer, Yum! Brands, Inc.
Slide 3: Forward-Looking Statements Disclaimer
Forward-Looking Statements Disclaimer This presentation may contain “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 provision
Slide 4: Agenda
Agenda Greg Creed, CEO, Yum! Brands Inc. David Gibbs, President & CFO, Yum! Brands Inc. Tony Lowings, Incoming CEO, KFC Global Artie Starrs, President, Pizza Hut U.S. Vipul Chawla, President, Pizza Hut International Julie Felss Masino, President, Taco Bell North America Liz Williams, President, Taco
Slide 5: A World of Opportunities
Slide 6: Greg Creed
Greg Creed CEO, Yum! Brands, Inc.
Slide 7: Category Leaders Around the World
Category Leaders Around the World Leader in Chicken Leader in Pizza Leader in Mexican 136 Countries 108 Countries 28 Countries 7 $26 BN System Sales $12 BN System Sales $10.5 BN System Sales ~22,000 Restaurants ~17,000 Restaurants ~7,000 Restaurants 50% Yum! Operating Profit 18% Yum! Operating Profi
Slide 8: Power of Yum! – Unprecedented Scale
Power of Yum! – Unprecedented Scale Three iconic brands The World’s Largest Restaurant Company > $46BN > 46,000 #1 > 140 2,000+ Globally in chicken, 2017 system sales Restaurants pizza and Mexican Countries and Franchisees food categories territories ~ 40% 98% 7 10K 270+ Operating profit in Restaura
Slide 9: Uniquely Diversified Portfolio
Uniquely Diversified Portfolio EUROPE 13% of Franchise Fees US 43% of Franchise Fees ASIA 26% of Franchise Fees CANADA & LATIN AMERICA AUSTRALIA 8% of Franchise Fees 4% of Franchise Fees MENA / AFRICA 6% of Franchise Fees Percentages are for full-year 2017
Slide 10: Collaboration Fuels Competitive Advantage
Collaboration Fuels Competitive Advantage Greg Creed Chief Executive Officer David Tracy Scott Tony Vipul Artie Julie Felss Liz Gibbs Skeans Catlett Lowings Chawla Starrs Masino Williams President & Chief General Chief Executive President, President, US President, President, Chief Financial Transfor
Slide 11: Our Transformation Journey
Our Transformation Journey 2017 – 2019 2016 Transformation of Yum! China Spin-off 2014 • More focused 1997 - 2013 Global Realignment International Expansion • Creating two • More franchised • Brand-focused powerful, teams independent, • More efficient • Spin-off from focused growth PepsiCo • Align o
Slide 12: Focus is Driving our Transformation
Focus is Driving our Transformation Distinctive, Bold Relevant & Easy Restaurant Brands Development Unrivaled Unmatched Culture & Franchise Talent Operating Capability
Slide 13: Relevant, Easy & Distinctive
Relevant, Easy & Distinctive
Slide 14: Relevant, Easy & Distinctive
Relevant, Easy & Distinctive
Slide 15: Relevant, Easy & Distinctive – Digital Ventures
Relevant, Easy & Distinctive Digital Ventures
Slide 16: Relevant, Easy & Distinctive
Relevant, Easy & Distinctive
Slide 17: Unmatched Franchise Operating Capability
Unmatched Franchise Operating Capability
Slide 18: Unmatched Franchise Operating Capability
Unmatched Franchise Operating Capability
Slide 19: Bold Restaurant Development
Bold Restaurant Development Accelerating Our Growth Rate ~1,700 KFC Pizza Hut > 40% Net-New 1,192 Taco Bell Units Opened 2016 2018F
Slide 20: Unrivaled Culture & Talent
vil, WOH Unrivaled Culture & Talent ING CULTURE 4! em : LWGe:nUe
Slide 21: Focus Will Unlock Future Growth
Focus Will Unlock Future Growth Distinctive, Bold Relevant & Easy Restaurant Brands Development Unrivaled Unmatched Culture & Franchise Talent Operating Capability
Slide 22: We Are Emerging with a New Mindset…
We Are Emerging with a New Mindset… FROM TO Equity operators Brand builders Same-store sales focus System sales focus Individual brands Collaborating as Yum! …sustained competitive advantage for franchisees
Slide 23: David Gibbs
David Gibbs President & Chief Financial Officer, Yum! Brands, Inc.
Slide 24: Confidence in our Path Forward
Confidence in our Path Forward A Stronger New Mindset Business Model
Slide 25: Confidence in our Path Forward
Confidence in our Path Forward Galvanizing Leaders, Franchisees & Employees
Slide 26: Confidence in our Path Forward
Confidence in our Path Forward
Slide 27: Delivering on our Commitments
Delivering on our Commitments Commitment Progress % of Franchise Ownership (YE 2018) 98% Achieved G&A Optimization (2019) 1.7% Sales On Track Run-Rate Capex (2019) $100MM On Track Capital Returned (‘17 – ’19) $6.5 to $7BN On Track
Slide 28: On Track for 2019 EPS of at Least $3.75
…On Track for 2019 EPS of at Least $3.75 Uniquely Diversified Portfolio 270+ ~40% ~2,000 Brand-Country Operating Profit in Total Franchisees Combinations Emerging Markets
Slide 29: Capital Expenditures
Capital Expenditures $40MM Restaurant Maintenance $10MM New Equity Development $50MM Project Capex $100MM Run-Rate Capex
Slide 30: Capital Expenditures ≤ Regular Refranchising Proceeds
Capital Expenditures $40MM Restaurant Maintenance $10MM New Equity Development $50MM Project Capex $100MM Run-Rate Capex Incremental New Unit Capex ≤ Regular Refranchising Proceeds
Slide 31: Capital Allocation Strategy
Capital Allocation Strategy Invest in Business • Run-rate Capex: ~$100MM Maintain Healthy Balance Sheet • Ensure liquidity and financial flexibility Pay Meaningful • Competitive dividend consistent with payout ratio of 45% - 50% Dividend Strategic • Continuously evaluate value-enhancing opportunitie
Slide 32: Diversified Debt Structure Reduces Risk
Diversified Debt Structure Reduces Risk 2,034 1,960 Total Debt = $10.1BN Maturities in millions Avg. Term = 7 years 1,643 Fixed Debt Mix = 91% Avg. Rate 2019 = 4.7% 2019F Int. Exp. = ~$470MM 1,050 750 625 494 350 350 325 250 275 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2037 2043 Legacy IG B
Slide 33: Confidence in our Ongoing Growth Model
Confidence in our Ongoing Growth Model 2020+ Same-Store Sales 2-3% Net-New Units 3-4% System Sales Mid to High Single-Digit Core Operating Profit High Single-Digit EPS Growth Low Double-Digits Total Shareholder Return Mid-Teens FCF Conversion >100%
Slide 34: Confidence in our Ongoing Growth Model
Confidence in our Ongoing Growth Model 2020+ Same-Store Sales 2-3% Net-New Units 3-4% ~4% System Sales Mid to High Single-Digit Core Operating Profit High Single-Digit EPS Growth Low Double-Digits Total Shareholder Return Mid-Teens FCF Conversion >100%
Slide 35: Confidence in our Ongoing Growth Model
Confidence in our Ongoing Growth Model 2020+ 2019 Same-Store Sales 2-3% Net-New Units 3-4% ~4% System Sales Mid to High Single-Digit Core Operating Profit High Single-Digit Low Double-Digits EPS Growth Low Double-Digits Mid- to High-Teens Total Shareholder Return Mid-Teens High-Teens FCF Conversion
Slide 36: What’s Next for Yum!
What’s Next for Yum! 2017 – 2019 2020+ 2016 Transformation of Yum! China Spin-off 2014 Global Realignment • More focused g • Creating two • More franchised • Brand-focused powerful, teams independent, • More efficient m focused growth • Align on global companies c-focused brand positioning market
Slide 37: Strengthening our Growth Model…
Strengthening our Growth Model… Leverage Expand Improved Unit Our Scale Capabilities Economics
Slide 38: Strengthening our Growth Model…
Strengthening our Growth Model… Leverage Expand Improved Unit Our Scale Capabilities Economics
Slide 39: Strengthening our Growth Model…
Strengthening our Growth Model… Leverage Expand Improved Unit Our Scale Capabilities Economics
Slide 40: Strengthening our Growth Model…
Strengthening our Growth Model… Leverage Expand Improved Unit Our Scale Capabilities Economics
Slide 41: …With Technology at the Forefront
…With Technology at the Forefront
Slide 42: In Summary
In Summary • Massive transformation on track and nearly complete • One-of-a-kind business model stronger than ever • Leveraging scale & expanding capabilities with a renewed focus on our franchisees
Slide 43: Slide 43
Slide 44: Unlocking Our Growth Potential
UNLOCKING OUR GROWTH POTENTIAL Investor Day | December 5th TONY LOWINGS
Slide 45: A Mega-Brand with Global Scale and Opening Momentum
~22,000 $26 BN RESTAURANTS SYSTEM A MEGA-BRAND SALES IN 136 COUNTRIES WITH GLOBAL SCALE AND OPENING MOMENTUM 1,000+ RESTAURANTS 99% FRANCHISED IN 2018 Figures are based on 2018F
Slide 46: KFC Sizzle Reel
KFC Sizzle Reel
Slide 47: Our Growth Drivers
OUR GROWTH DRIVERS Building a Opening a R.E.D. Brand New Restaurant Every 5 Hours 5 Distinctive, Bold Unmatched Unrivaled Relevant & Restaurant Franchise Culture & Easy Brands Development Operating Talent Capability
Slide 48: R.E.D.
R. E. D. RELEVANT EASY DISTINCTIVE
Slide 49: R.E.D.
R. E. D. RELEVANT EASY DISTINCTIVE
Slide 50: World Famous Kentucky Fried Chicken – Globally Relevant
WORLD FAMOUS KENTUCKY FRIED CHICKEN – GLOBALLY RELEVANT
Slide 51: Innovation That Creates Crave
INNOVATION THAT CREATES CRAVE CORE INNOVATION CORE BUILDS BASE INNOVATION CULT INNOVATION BUILDS BUZZ
Slide 52: Value Is an Intrinsic Driver
VALUE IS AN INTRINSIC DRIVER 1 4 Group Group 2 Individual EVERYDAY DISRUPTIVE Individual 5 VALUE VALUE Snacking Snacking 3 6
Slide 53: Re-becoming “Fast Good” vs Fast Food
RE-BECOMING “FAST GOOD” VS FAST FOOD REAL MEALS FOOD CREDENTIALS SUSTAINABLE BELIEVE IN ALL PACKAGING PEOPLE Handmade Employee Good At Core Engagement Committed To Local Farmers Reusable Or Recoverable Wrapped In Good Social Impact Open Kitchens
Slide 54: Being Culture-Centric in 136 Countries
BEING CULTURE-CENTRIC IN 136 COUNTRIES Mass Reach FRANCE UNITED STATES Optimization RUSSIA AUSTRALIA Football Partnership 5 Spice Girls + 6 Herbs Esports Tie-in Taking KFC to the Outback KFC Australia takes Finger Soccer World Cup 2018: Lickin’ Good chicken to The French Football Federation Outback
Slide 55: R.E.D.
R. E. D. RELEVANT EASY DISTINCTIVE
Slide 56: Building a Truly Omnichannel Business
DINE IN & CARRY OUT BUILDING A TRULY KIOSK AGGREGATOR OMNICHANNEL BUSINESS BUILDING A TRULY CLICK & DRIVE THRU COLLECT OMNICHANNEL OWN DELIVERY WEB ORDERING BUSINESS
Slide 57: Putting the Choice in Our Customers’ Hands
PUTTING THE CHOICE IN OUR CUSTOMERS’ HANDS CLICK & COLLECT KIOSKS DELIVERY Delivery Targeting over 18,000 Rapidly deploying across Partnering with collection points Europe and other markets the best-in-breed
Slide 58: By 2020 We Will Have…
BY 2020 WE WILL HAVE… More kiosk More click and More restaurants terminals globally collect outlets than doing delivery than any than… the combined total of… pizza delivery company
Slide 59: Easy to Connect with Customers
EASY TO CONNECT WITH CUSTOMERS MASS REACH CONVERT AT POINT RETAINING OUR OPTIMIZATION OF HUNGER LOYAL CUSTOMERS
Slide 60: Using Technology to Unlock Ease for Customers and Teams
USING TECHNOLOGY TO UNLOCK EASE FOR CUSTOMERS AND TEAMS VIDEO-GUIDED FRICTIONLESS INTERACTIVE TRAINING ORDERING Piloted in 50 restaurants in Allowing customers to order Latin America KFC in their own way
Slide 61: R.E.D.
R. E. D. RELEVANT EASY DISTINCTIVE
Slide 62: We Have Many Imitators
WE HAVE MANY IMITATORS BUT WE’RE ALWAYS ORIGINAL
Slide 63: KFC’s Distinctive Assets
KFC KFC’S DISTINCTIVE ASSETS | | | , Kas _its finger lickin good ALWAYS = ORIGINAL Beck 3 = ALWAYS ORIGINAL cx = [coves |} FINGER LICKIN’ GOOD, ¥ > THE SPIRIT OF DONE Ligh Went WAY bp se ANDERS HW =) \ == \j /
Slide 64: KFC Advertising Reel
KFC Advertising Reel
Slide 65: R.E.D.
R. E. D. RELEVANT EASY DISTINCTIVE
Slide 66: Our Growth Drivers
OUR GROWTH DRIVERS Opening a New Restaurant Every 5 Hours 5
Slide 67: 2/3 of the World’s KFCs Are Yet to Be Built
KFC RESTAURANT PENETRATION Restaurants per million people EMERGING MARKETS 2/3 OF THE DEVELOPED MARKETS 14 WORLD’S KFC’S 40,000+ ARE YET TO opportunity BE BUILT 4 4 1 Top 6 Other China Other
Slide 68: Our Track Record of Growth Is Accelerating
ANNUAL NET NEW UNITS 1,000+ OUR TRACK 1,000+ RECORD OF 844 GROWTH IS 568 657 ACCELERATING… 2015 2016 2017 2018F
Slide 69: …And Will Grow Even Faster
…AND WILL GROW EVEN FASTER BUSINESS MODEL DEVELOPMENT AGREEMENTS SMALLER FORMATS BIG DATA + Investment in Capability and Processes
Slide 70: The Business Model Is Strong… and Franchisees Are Signing Up for Growth
THE BUSINESS MODEL …AND FRANCHISEES IS STRONG… ARE SIGNING UP FOR GROWTH ~4 years # of NNU Contracted 2019: 2020: 650 700 Today Restaurant Paybacks NNU Contracted are not overall development targets, they represent a portion of total development.
Slide 71: UK Case Study: High ROI Formats for Every Occasion
UK CASE STUDY: HIGH ROI FORMATS FOR EVERY OCCASION TRADITIONAL FORMATS 2,950 sq.ft 1,500 sq.ft. CAMPUS SMALLBOX DRIVE THRU LITE URBAN SMALL BOX FOOD COURT/TRAVEL HUB 1,300 sq.ft. 700 sq.ft. 1,000 sq.ft. 800 sq.ft.
Slide 72: Russia Case Study: Big Data Brings Greater Predictability
RUSSIA CASE STUDY: BIG DATA BRINGS GREATER PREDICTABILITY TO NEW RESTAURANT PERFORMANCE MOSCOW HOT-SPOTS
Slide 73: KFC Growing Rapidly in Established Markets
KFC GROWING RAPIDLY IN ESTABLISHED MARKETS INDONESIA UK RUSSIA Strong paybacks: 50 NNU over the last 2 Powerful business Opening 200 NNU since years through a focus model, over 280 NNU the beginning of 2013 on Small box in last 3 years *NNU figures are rounded to nearest 10 Indonesia Jan ‘13 to Q3 ’
Slide 74: And Unlocking Potential in Nascent Markets
AND UNLOCKING POTENTIAL IN NASCENT MARKETS BRAZIL INDIA PAKISTAN 211 mm 1,354 mm 201 mm (5th largest population) (2nd largest population) (6th largest population) <50 KFC’s <400 KFC’s <100 KFC’s *SSSG YTD to Q3 2018
Slide 75: Great Development Momentum in the U.S.
GREAT DEVELOPMENT MOMENTUM IN THE U.S. NNU turnaround, Asset actions New 2019 back in delivering in a Restaurants growth big way & Image New Unit PRAs $MM Net New Units $1.83 2014 2015 2016 2017 2018F $1.64 $1.58 $1.60 BRONX, NY 139% 1ST URBAN INLINE – U/C ~30 vs. System ~37% Lift ~53% Lift 144% vs.
Slide 76: Globally KFC Will Continue to Deliver Strong NNU Growth
GLOBALLY KFC WILL CONTINUE TO DELIVER STRONG NNU GROWTH ANNUAL NNU 1,250+ 1,000+ 690 2015 - 2017 avg 2018F 2020+
Slide 77: That’s How We Grow, and...
THAT’S HOW WE GROW, AND...
Slide 78: Yum! Analyst Day
Yum! Analyst Day December 5, 2018
Slide 79: Artie Starrs
Artie Starrs President, Pizza Hut U.S.
Slide 80: Iconic Brand with Global Scale & Balanced Footprint
ICONIC BRAND WITH GLOBAL SCALE & BALANCED FOOTPRINT $12BN SYSTEM SALES 17K UNITS 108 COUNTRIES U.S.: $5.5BN U.S.: 7,500 Int’l: $6.7BN Int’l: 9,500
Slide 81: Aligned Delco Growth Model with Dine-In Legacy Dynamics
ALIGNED DELCO GROWTH MODEL WITH DINE-IN LEGACY DYNAMICS U.S. INTERNATIONAL % FZ 99.7% 99.6% Delivery Unit Growth 100+ 500+ (Gross Assets) % Digital Sales 55% 40% (Delivery & Carryout) % Dine-In Sales 10% 50% % Dine-In Assets 40% 40%
Slide 82: Distinctive, Relevant & Easy Brands
Distinctive, Bold Unmatched Unrivaled Relevant & Restaurant Franchise Culture & Easy Brands Development Operating Talent Capability
Slide 83: International
Distinctive, Bold Relevant & Restaurant Easy Brands Development INTERNATIONAL
Slide 84: U.S.
Distinctive, Unmatched Relevant & Franchise Easy Brands Operating Capability U.S.
Slide 85: PH U.S. Video
PH U.S. VIDEO
Slide 86: Proud but Dissatisfied
P29) D:BUT DISSATISFIED
Slide 87: Executing Turnaround of Pizza Hut U.S. Business
EXECUTING TURNAROUND OF PIZZA HUT U.S. BUSINESS IMPROVED DELIVERY OPERATIONS INCREASED DIGITAL CAPABILITIES COMPETITIVE VALUE
Slide 88: Improving Our Hot, Fast, Reliable Customer Experience
IMPROVING OUR HOT, FAST, RELIABLE CUSTOMER EXPERIENCE 3 30% MINUTES Average Delivery Time Customer Complaints
Slide 89: Squarely in the Digital Game
SQUARELY IN THE DIGITAL GAME 15% Digital Growth* 55% Digital HMR+ > 70% Online from Mobile Growing Loyalty Program *YOY Online Growth + HMR, Home Meal Replacement (Delivery and Carryout)
Slide 90: Providing Customers Competitive Value
PROVIDING CUSTOMERS COMPETITIVE VALUE
Slide 91: Restaurants Executing Against Strategy Are Overperforming
RESTAURANTS EXECUTING AGAINST STRATEGY ARE OVERPERFORMING
Slide 92: However, We’re Still Lagging on Value & Delivery Perceptions…
HOWEVER, WE’RE STILL LAGGING ON VALUE & DELIVERY PERCEPTIONS… ‘Is a Good Value for the Money’ ‘Is a Good Value forwith ‘Associated the Money’ Total Occasion Users Last Occasion Delivery Users Occasion’ National Competitors NationalCompetitors National Independents Competitors
Slide 93: ‘Typical’ Dine-In Asset Dine-In Focus
‘Typical’ Dine-In Asset Dine-In Focus
Slide 94: New Delco Asset Delivery Focus
New Delco Asset Delivery Focus
Slide 95: New Fast Casual Delco Units Driving Unit and Sales Growth
NEW FAST CASUAL DELCO UNITS DRIVING UNIT AND SALES GROWTH ü CONSISTENT DELIVERY ENGINE ü 70 OPENED TO DATE ü ~30% GROWTH, SAME LOCATION
Slide 96: Bold Restaurant Development Supported by Our Franchisees
BOLD RESTAURANT DEVELOPMENT SUPPORTED BY OUR FRANCHISEES 2.3K Restaurants 46 ‘Growth-Ready’ Transacted Since 2016 Franchisees
Slide 97: Innovation NFL Launch
| IVE WILL DRIVE TRIAL AND IMPROVED BRAND PERCEPTION
Slide 98: Innovation
INCTIVE WILL DRIVE TRIAL AND IMPROVED BRAND PERCEPTION
Slide 99: NFL Launch
DISTINCTIVENESS WILL DRIVE TRIAL AND IMPROVED BRAND PERCEPTION iF NFL s eeasanse
Slide 100: PH U.S. Social Sizzle Video
PH U.S. SOCIAL SIZZLE VIDEO
Slide 101: Proud, but Dissatisfied
PROUD, BUT DISSATISFIED üHot, Fast, Reliable q Value Perceptions üDigital Growth & Capability q Delivery Perceptions üCompetitive Value q Asset Image & Positioning üGrowth Ready Franchisees q Distinctive Advertising
Slide 102: Vipul Chawla
VIPUL CHAWLA President, Pizza Hut International
Slide 103: PH International Video
PH INTERNATIONAL VIDEO
Slide 104: Competitive Value, Easy Access, Best Tasting Pizzas
COMPETITIVE EASY ACCESS BEST TASTING VALUE PIZZAS
Slide 105: Growth
9 UX LAUNCHED IN MARKETS DOUBLE-DIGIT CONVERSION GROWTH
Slide 106: Progress in Delivery & Carry Out but Must Stem Dine-In Decline
PROGRESS IN DELIVERY & CARRY OUT BUT MUST STEM DINE-IN DECLINE Delivery & Carry Out Dine-In § Solid Growth Foundation in Place § Building on Pockets of Strength § Doubling Down on Modern Pizza § Managing Transformation & Experience to Further Accelerate Accelerating Transition of Estate
Slide 107: Dine-In Legacy Creates Unique Dynamics
DINE-IN LEGACY CREATES UNIQUE DYNAMICS Sluggish Category Inconsistent Distinct Success Growth Execution Factors vs. Delivery & Carry Out
Slide 108: Dine-In Legacy Creates Unique Dynamics
DINE-IN LEGACY CREATES UNIQUE DYNAMICS Leverage Best Practices Targeted Solutions to from Global Success Cases Reflect Market Realities
Slide 109: Our Asset Base Will Continue to Transition and Help SSSG
OUR ASSET BASE WILL CONTINUE TO TRANSITION AND HELP SSSG Dine-in Assets Projected 42% of Assets Today 25%of Assets in ~3-5 years1 1 Subject to Telepizza deal close
Slide 110: Unit Growth Dominated by Small Format Assets
UNIT GROWTH DOMINATED BY SMALL FORMAT ASSETS ~90% Of NNU FAST CASUAL DELCO, LUTON, UK
Slide 111: Net New Unit Growth by Market
INDONESIA INDIA JAPAN ~50+ ~35+ 51 ~55+ 21 12 20 2 -6 -18 2015 2016 2017 2018F -1 2015 2016 2017 2018F -3 2015 2016 2017 2018F POLAND THAILAND TURKEY ~30+ ~25+ 26 ~15+ 15 7 12 1 7 1 -3 -10 2015 2016 2017 2018F 2015 2016 2017 2018F 2015 2016 2017 2018F
Slide 112: Growth Fueled by 3C Partners – Indonesia
GROWTH FUELED BY 3C PARTNERS INDONESIA 432 38% 44% LTM Delivery Delivery Assets Restaurants NNU Growth vs 28% in 2012
Slide 113: Growth Fueled by 3C Partners – India
GROWTH FUELED BY 3C PARTNERS INDIA 413 25% 57% LTM Delivery Delivery Assets Restaurants NNU Growth vs 44% in 2012
Slide 114: Note: Subject to deal closure
Note: Subject to deal closure
Slide 115: Becoming #1 in the Region
BECOMING #1 IN THE REGION 2,500 1,150 Pizza Hut Pizza Hut + Today Telepizza In Latin America & Iberia In Latin America & Iberia Note: Subject to deal closure; Pizza Hut unit counts today reflect total units through Q3 2018 and include Brazil, which is managed by another franchisee , as part of the L
Slide 116: NNUs Over 20 Years
Total Telepizza Unit Contribution 1.25K ~5K >2,500 1.3K ~2.5K NNUs Over 20 Years 2018F NNUs NNUs 2038F Existing Units Years 1-10 Years 11-20 Note: Subject to deal closure; 2018F includes existing Pizza Hut units and ~1,500 existing Telepizza units
Slide 117: U.S. vs International Restaurants per Million Population
U.S. INTERNATIONAL >20 PIZZA HUT RESTAURANTS <2 PIZZA HUT RESTAURANTS PER MM POPULATION PER MM POPULATION
Slide 118: Proud, but Dissatisfied
PROUD, BUT DISSATISFIED PDelivery & Carry Out q Scale Modern Pizza Growth Foundation Experience, Leaning in on Competitive Value PAccelerated Digital Transformation q Manage Dine-In Decline & Transform Estate to PNNU Growth Mitigate SSSG Drag Momentum
Slide 119: Taco Bell North America – Julie Felss Masino
DECEMBER 2018 YUM! BRANDS ANNUAL INVESTOR CONFERENCE JULIE FELSS MASINO PRESIDENT, TACO BELL NORTH AMERICA Company Confidential – Do Not Copy Or Circulate. ©2018 Taco Bell IP Holder, LLC
Slide 120: Taco Bell Opening Sizzle Video
VIDEO Taco Bell Opening Sizzle
Slide 121: An Industry Leading Powerhouse
AN INDUSTRY LEADING POWERHOUSE System Sales Restaurants Countries Yum! Profit Contribution $10.5BN 6,950 28 32% Dominant Brand Speed Social #4 #1 TOP 5 #1 Largest U.S. “America’s Favorite in QSR Restaurant Brand Restaurant Brand Mexican Restaurant” on Social Media Technomic, February 2018 Harris Pol
Slide 122: Strong System Sales Growth
STRONG SYSTEM SALES GROWTH SYSTEM SALES ($BN) $10.5 $10.1 $9.7 $9.1 $8.5 $8.1 $7.8 2012 2013 2014 2015 2016 2017 LTM Q3 2018 ADDING ~$500MM ANNUALLY ON AVERAGE SINCE 2012 Company Confidential – Do Not Copy Or Circulate. ©2018 Taco Bell IP Holder, LLC 4
Slide 123: Fueled by the Recipe for Growth
FUELED BY THE RECIPE FOR GROWTH DISTINCTIVE, RELEVANT & EASY BRAND UNMATCHED FZ OPERATING CAPABILITY CUSTOMER BOLD RESTAURANT DEVELOPMENT UNRIVALED CULTURE & TALENT TEAM MEMBER Company Confidential – Do Not Copy Or Circulate. ©2018 Taco Bell IP Holder, LLC 5
Slide 124: Consistent Strong Performance
CONSISTENT STRONG PERFORMANCE SAME-STORE SALES GROWTH NET NEW UNITS (2013-2017) Taco Bell 5% 720 QSR Industry 4% COMBINED (135) 3% 3% 3% 3% NNU OVER 5 YEARS 2%2% 2% 2% 35 1% (50) 0% (120) 2013 2014 2015 2016 2017 YTD 2018 Q1-Q3 U.S. Units: 6,450 7,225 5,775 14,025 (YE’17) Company Confidential – Do N
Slide 125: Winning with the Consumer
WINNING WITH THE CONSUMER #1 MEXICAN CONSUMER RESTAURANT SENTIMENT AT ALL-TIME HIGH INTERNET- #1 BRAND IN BREAKING SOCIAL + BRAND MOMENTS HEALTH METRIC Company Confidential – Do Not Copy Or Circulate. ©2018 Taco Bell IP Holder, LLC 7
Slide 126: Delivering Value Without Compromise
DELIVERING VALUE WITHOUT COMPROMISE AN INDUSTRY LEADER IN VALUE Company Confidential – Do Not Copy Or Circulate. ©2018 Taco Bell IP Holder, LLC 8
Slide 127: We Find Our Unique Ways In
WE FIND OUR UNIQUE WAYS IN AND WE FIND THE MOST CATEGORY OF ONE WAYS TO LAUNCH THEM Company Confidential – Do Not Copy Or Circulate. ©2018 Taco Bell IP Holder, LLC 9
Slide 128: More Big Ideas on the Way
MORE BIG IDEAS ON THE WAY Company Confidential – Do Not Copy Or Circulate. ©2018 Taco Bell IP Holder, LLC 10
Slide 129: Driving Access and Ease
DRIVING ACCESS AND EASE eCOMM KIOSKS DELIVERY CUSTOMER DATA SCALABLE PLATFORM DEPLOYING LAUNCHING DEVELOPING WITH HUGE RUNWAY SYSTEM-WIDE NATIONALLY 1H 2019 CRM PLATFORM Company Confidential – Do Not Copy Or Circulate. ©2018 Taco Bell IP Holder, LLC 11
Slide 130: One System: Executing with Excellence
ONE SYSTEM: EXECUTING WITH EXCELLENCE DEVELOPMENT OPERATIONS CULTURE Company Confidential – Do Not Copy Or Circulate. ©2018 Taco Bell IP Holder, LLC 12
Slide 131: Flexible Assets
FLEXIBLE ASSETS FREESTANDING IN-LINE CANTINA WALK-UP W/ DRIVE-THRU STRONG RETURNS DRIVING DEVELOPMENT Company Confidential – Do Not Copy Or Circulate. ©2018 Taco Bell IP Holder, LLC 13
Slide 132: Bringing Category of One Experiences to Life
BRINGING CATEGORY OF ONE EXPERIENCES TO LIFE PREVIOUS ASSETS $1.5BN INVESTED OVER THE LAST 5 YEARS Company Confidential – Do Not Copy Or Circulate. ©2018 Taco Bell IP Holder, LLC 14
Slide 133: Executing Our U.S. Growth Plan
EXECUTING OUR U.S. GROWTH PLAN SAME-STORE SALES DEVELOPMENT ALL ACCESS Yum! Board - Restricted Confidential 15
Slide 134: Taco Bell International – Liz Williams
DECEMBER 2018 YUM! BRANDS ANNUAL INVESTOR CONFERENCE LIZ WILLIAMS PRESIDENT, TACO BELL INTERNATIONAL Company Confidential – Do Not Copy Or Circulate. ©2018 Taco Bell IP Holder, LLC
Slide 135: International at a Glance
INTERNATIONAL AT A GLANCE 437 176 RESTAURANTS 101 (+150 Multibrands) CANADA [1] 86 EUROPE [1] 12 ASIA 211 MIDDLE 27 EAST INT’L COUNTRIES LATIN [1] (+4 Military) AMERICA 9 1 NEW AUSTRALIA MARKETS (Since 2014) [1] Includes Multibrand Units. All figures as of Q3 2018. Company Confidential – Do Not Copy
Slide 136: Relevant, Easy, Distinctive
RELEVANT, EASY, DISTINCTIVE EFFORTLESSLY COOL, CREATIVE, CONVENIENT, CULTURE CENTRIC, CRAVEABLE & FAST & LIFESTYLE AFFORDABLE FRICTIONLESS Brand Food Experience Company Confidential – Do Not Copy Or Circulate. ©2018 Taco Bell IP Holder, LLC 18
Slide 137: Building Awareness Around the World
BUILDING AWARENESS AROUND THE WORLD NEW OPENINGS KEY EVENTS INNOVATION Company Confidential – Do Not Copy Or Circulate. ©2018 Taco Bell IP Holder, LLC 19
Slide 138: Spain: Portfolio Approach to Growth
SPAIN: PORTFOLIO APPROACH TO GROWTH TB TORREJÓN TB Plaza del Ayuntamiento TB SAMBIL (Drive-Thru) (Inline) (Food Court) 50 Units by End of 2018 Opening 250 Units Over the Next 10 years Company Confidential – Do Not Copy Or Circulate. ©2018 Taco Bell IP Holder, LLC. Forward-looking figures are Taco Be
Slide 139: India: Poised for Tremendous Growth
INDIA: POISED FOR TREMENDOUS GROWTH 35 Units by End of 2018 Opening 100 Units Over the Next 3 Years Company Confidential – Do Not Copy Or Circulate. ©2018 Taco Bell IP Holder, LLC. Forward-looking figures are Taco Bell’s estimates. 21
Slide 140: Australia/NZ: Amazing Growth Ahead
AUSTRALIA/NZ: AMAZING GROWTH AHEAD GLOBAL DESIGN LOCAL INSPIRATION Company Confidential – Do Not Copy Or Circulate. ©2018 Taco Bell IP Holder, LLC 22
Slide 141: Focused Approach to Growth
FOCUSED APPROACH TO GROWTH BUILDING SCALE BUILDING REACH BRAZIL RUSSIA SPAIN U.K. CENTRAL AMERICA INDIA CHINA EASTERN EUROPE SOUTHEAST ASIA AUSTRALIA/NZ 1,000+ Per Market Unit Potential 100+ Per Market Unit Potential Company Confidential – Do Not Copy Or Circulate. ©2018 Taco Bell IP Holder, LLC. Fo
Slide 142: Category of One for Everyone
CATEGORY OF ONE for everyone $10.5 BILLION System Sales Globally Today Growing to $15 BILLION Tomorrow Today reflects Q3 2018. Company Confidential – Do Not Copy Or Circulate. ©2018 Taco Bell IP Holder, LLC 24
Slide 143: Thank You!
DECEMBER 2018 YUM! BRANDS ANNUAL INVESTOR CONFERENCE THANK YOU! Company Confidential – Do Not Copy Or Circulate. ©2018 Taco Bell IP Holder, LLC