Pizza Hut 2013 Annual Report Download - page 3

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David C. Novak
Chairman & Chief Executive Officer,
Yum! Brands, Inc.
Dear Partners,
2013 was clearly a challenging year, as full-year EPS declined 9% to
$2.97 per share, excluding special items. While these results were
driven by the underperformance of our KFC China business, the rest
of Yum! delivered essentially on-target results.
If you’ve followed us over the years, you know one of the things
we’re most proud of as a company is our ability to drive what we call
dynasty-like performance, which is generating at least 10% growth
in earnings per share year after year. As you know, when a company
does that, its’ stock price takes care of itself. And we achieved at
least 13% EPS growth, excluding special items, for 11 consecutive
years until 2013.
Though our 2013 results were well below our own high standards for
performance, we used the year as an opportunity – I’d say imperative
– to take a step back, re-evaluate and strengthen all aspects of the
business so that we come out stronger and better prepared to win
going forward, not just in China but all around the world.
I’d go as far to say that we did some of our very best
work in 2013 readying for the future. I want to highlight
the work we did last year to set us up for a strong
bounce-back year in 2014, and re-establish our track
record of consistent double-digit EPS growth in the
years ahead.
Let me start with our decision to reorganize the business. As of
January 1, 2014, we combined our Yum! Restaurants International
and U.S. divisions into three global brand divisions: KFC, Pizza Hut
and Taco Bell. China and India will remain separate divisions given
their strategic importance and tremendous growth potential.
Going forward, our three new divisions will define and drive the
strategic positioning and operating models for KFC, Pizza Hut and
Taco Bell, and will work closely with our China and India teams to
ensure tight integration on brand initiatives. We believe having 100%
focused brand teams will enable us to more aggressively accelerate
growth in a way that generates higher returns and enhances
shareholder value. We also believe know how sharing will be more
powerful by bringing the U.S. and international businesses together.
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