Pizza Hut 2015 Annual Report Download - page 2
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02
02 DEAR STAKEHOLDERS
04 CHINA DIVISION
06 KFC DIVISION
07 PIZZA HUT DIVISION
08 TACO BELL DIVISION
09 HUGE HEART
10 CONCLUSION
CONTENTS
2015 was a landmark year for Yum! Brands. Late in the year we announced our
intention to spin-off our China business into an independent, publicly-traded company.
Our decision to create two powerful, independent, focused growth companies is a
classic example of one plus one being greater than two. Yum! China will be China’s
largest independent restaurant company, with no meaningful external debt. New Yum!
will be a global, diversified, franchise company with an optimized capital structure. The
separation of these two distinctly different businesses will give shareholders the best of
both worlds. Yum! China will be a focused China investment with strong national appeal and
major growth potential and will target annual ongoing EPS growth of approximately 15%.
This company will have tremendous new-unit potential in China’s growing consumer economy
and inherent value from improving unit economics. Yum! China will also have a self-sufficient
business model, funding all of its capital needs, while having the potential for stock buybacks in
year one. New Yum! will be an even more highly franchised
company with three leading global brands, leadership in
emerging markets, clear average-unit volume and new-
unit growth opportunities, less volatile cash and earnings
streams, and high shareholder cash returns. New Yum! will
target approximately 15% annual ongoing shareholder
return, defined as EPS growth plus dividend yield.
In addition, we intend to return approximately $6.2 billion
in capital to our shareholders prior to the completion
of the spin-off. This is an incremental return of capital
beyond our regularly planned dividend.
Needless to say, 2016 will be a transformational year for
Yum! as we complete this spin-off. The fundamental
goal of Yum!, however, is unchanged. We are 100%
dedicated to building and strengthening KFC, Pizza
Hut and Taco Bell all around the world as strong
brands are critical to delivering sustained growth
and creating long-term shareholder value.
DEAR STAKEHOLDERS,
15%
ANNUAL ONGOING
EPS GROWTH IN CHINA
$6.2 BILLION
OF INCREMENTAL CAPITAL RETURN PRIOR TO
CHINA BUSINESS SPIN-OFF COMPLETION
Please see our Safe Harbor Statement
in the back following the Form 10-K.