Pizza Hut 2014 Annual Report Download - page 4

Download and view the complete annual report

Please find page 4 of the 2014 Pizza Hut annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 176

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152
  • 153
  • 154
  • 155
  • 156
  • 157
  • 158
  • 159
  • 160
  • 161
  • 162
  • 163
  • 164
  • 165
  • 166
  • 167
  • 168
  • 169
  • 170
  • 171
  • 172
  • 173
  • 174
  • 175
  • 176

CHINA DIVISION
Given our long-term positive outlook for China—and
our continued belief that our current sales issues are
temporary—we opened 737 new restaurants across the
country in 2014. We continued our disciplined approach to
development, shifting our new-unit program toward higher
return investments. In 2015, we plan to open 700 more
new units in China. In addition to the massive new-unit
opportunity we have with KFC and Pizza Hut Casual Dining,
we will continue to expand Pizza Hut Home Service as well.
I want to assure you our recovery in China is my top
priority and all hands are on deck to get the business
back on track as soon as possible.
We have a tremendous sales-leverage opportunity as China
sales recover and we fully expect to realize this over time.
I have great confidence in Sam Su, our Vice Chairman and
China division CEO, and his ability to capture this enormous
upside and win with even stronger brands in the world’s
fastest growing economy.
KFC CHINA
KFC is a beloved brand in China with a huge advantage
not only in scale, but also in innovation, quality and people
capability. As the #1 foreign brand in China, KFC has 4,800
units in 1,000 cities. This is more than twice the size of our
nearest competitor. Although 2014 average unit volumes
were 20% o their peak levels, restaurant level margins
were a respectable 15%. These fundamentals, even in a
challenging year, demonstrate we can open new units with
attractive returns for our shareholders. We know we have
work to do to regain consumers’ trust, and we're making
progress. Once we do, the opportunities are tremendous.
I have no doubt KFC will be an even stronger leading
brand as we evolve our strategy for the changing Chinese
consumer, making KFC more contemporary, engaged
and connected.
737
New Restaurants
in 2014
KFC has
4,800
Units in
1,000 Cities
2