百胜中国 2024年度报告

Dear Stockholders, 2024 was another record-breaking year for Yum China. Amid a challenging external environment, we deliveredexcellent results, reflecting the strength and resilience of our business. The hard work and unwavering dedication ofour people made these achievements possible. Record 2024 results featured both strong top- and bottom-line growth, along with substantial capitalreturns to stockholders. 2024Returned approximately$1.5Billionin capital toour stockholders On the top line, we opened a record 1,751 net new stores, driving system sales and revenue to new heights, bothgrowing at 5% year-over-year1. We have chalked up eight consecutive quarters of same-store transaction growth,while our same-store sales index improved sequentially since the second quarter of 2024. On the bottom line, we protected our margins by generating value at scale. Core operating profit surged to $1.2billion, a 12% increase year-over-year2. In 2024, we returned approximately $1.5 billion in capital to our stockholders,a historic high, representing approximately 9% of Yum China’s market capitalization at the year end. We are ontrack to return $4.5 billion to stockholders from 2024 to 2026, fully committed to providing attractive returns to ourstockholders. Our core brands, KFC and Pizza Hut, tapped into underserved markets and grew incremental traffic, sales, and profitin 2024. This was achieved through constant product innovation, expanding into different food categories, differentprice ranges, and different strategic locations and geographies. At KFC, we introduced exciting new takes on classics like the Original Recipe Chicken Burger and Gigantic EggTart. At Pizza Hut, our revamped menu featured lower prices on some of our iconic products, and introduced newor upgraded offerings like Pizza Dough Burgers and Golden Salty Egg Chicken Pizza. During the year, both brandsrolled out breakthrough models, KFC’s KCOFFEE Cafe and Pizza Hut’s WOW, both helped drive sales and transactiongrowth. The number of KCOFFEE Cafes and Pizza Hut WOW stores surpassed 700 and 200 respectively by year-end. We continue to see fantastic long-term growth opportunities in China. Relatively low housing and living costs in lower-tier cities leave ample potential for consumer spending. To spearhead our expansion into smaller cities and towns,we created another new flexible store model – the KFC small town mini. This model requires just a half million RMBinvestment, roughly one-third that of a normal store. Our flexible store models allow us to penetrate effectively acrosscity tiers and locations. In 2024, our payback period for new stores held steady at two years for KFC and improved totwo to three years at Pizza Hut. We have also identified opportunities in strategic locations like highway service centers, college campuses, hospitals,gas stations and other tourist areas. KFC’s store at Tongji University is a notable example, gaining lots of traction oncampus. We are leveraging partnerships with franchisees with local resources to unlock opportunities in these strategiclocations and lower-tier cities that were previously beyond our reach. We view franchising as complementary to ourequity business, a strategic tool to drive incremental growth and buttress our market position. We are acceleratingfranchise store opening, anticipating our franchise mix to gradually increase to 40-50% of KFC’s and 20-30% of PizzaHut’s net new stores over the next few years. Our other brands also made progress. Lavazza continued to grow through its dual growth engines of coffee shopsand retail business. Store economics have meaningfully improved due to better operational efficiency and reducednew store capex. Its retail business saw sales grow over 30% and became profitable in 2024. We have also madegood progress in building appreciation for Lavazza’s coffee expertise and enriching food choices. For Little Sheepand Huang Ji Huang, our focus has been on improving their menus, refining store models, and strengthening theirsupply chain. For Taco Bell, in 2024, we pruned our store portfolio to focus on our key markets, Beijing and Shanghai,leading to improved operating results. We carried out two major initiatives in 2024 – Project Fresh Eye and Project Red Eye. Both contributed to our 2024bottom-line growth, and, just as importantly, they also brought further enhancements to our long-term operationalefficiency and resilience. Project Fresh Eye assessed our operations through the lens of our Restaurant GeneralManagers to identify measures that help them manage routine tasks more efficiently, so that they can focus moreon customer service. Project Red Eye looked at our operations from our customers’ perspective, aiming to improvecost of sales through spending better and buying better across our organization. Pursuing these multifacetedimprovements while maintaining rapid growth was challenging, but they served us well, as we were able to investmuch of the cost savin