Pizza Hut 2002 Annual Report Download - page 5

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3.
I’m sure you’ll agree the best year any business
can have is when you beat your financial plan and set the table for future
growth. I’m pleased to report 2002 was just that kind of year for Yum! Brands.
Our stated long-term goal is to grow our annual earnings per share by at least 10% every year. In 2002, we grew
ongoing operating earnings per share 19%. We also said 2002 would be a year of revenue growth, and we deliv-
ered on that promise, with 12% revenue growth. We expanded our core international restaurant portfolio by 6%,
and at the same time, we achieved our 2% blended same store sales target in U.S. company-owned restaurants.
Our U.S. systemwide same store sales, including the sales of our franchise partners, performed even better
—
up
4%. Internationally, we once again set a new record for traditional restaurant openings, 1,051 to be exact, and grew
international ongoing operating profits 22%. Worldwide restaurant margins also reached an all time high at 16%,
up 1.2 points versus last year. Our Return on Invested Capital was 18%, the highest in the quick-service restaurant
industry. By any measure, 2002 was an outstanding year for your company.
With all this good news, I by no means want to gloss over the challenges we face. We obviously have both our
opportunities and issues and I will deal directly with them in this letter. Let me start by acknowledging that our
U.S. business competes in a very challenging and competitive marketplace. Some pundits, in fact, have written that
the U.S. quick-service restaurant industry is oversaturated and mature. Maybe so for some brands and some com-
panies. But we are building Yum! for long-term growth around three unique building blocks that differentiate us
from our competition and provide an exciting growth opportunity. We are anything but your ordinary restaurant
company. Let me explain.
Dear
partners,