Financial Performance - Total revenue grew by 1% to $5.64 billion, or 5% excluding foreign currency translation effects[1] - Net profit attributable to Yum China Holdings, Inc. was $499 million, up from $486 million in the prior year[6] - Net profit for the six months ended June 30, 2024, was $535 million, compared to $527 million in the same period of 2023, reflecting a year-over-year increase of 1.5%[8] - Comprehensive income, including non-controlling interests, was $424 million, compared to $282 million in the previous year[7] - Diluted earnings per share rose by 10% to $1.26, or 14% excluding foreign currency translation effects[2] - The company reported a significant operating profit margin, with total costs and expenses netting $4.390 billion, resulting in an operating profit of $1.244 billion[60] - The effective tax rate for the six months ended June 30, 2024, was 26.2%, a decrease from 27.0% in 2023, primarily due to a reduction in non-deductible items[51] - The actual tax rate for the six months ended June 30, 2024, was 26.2%, slightly lower than 27.0% in the same period of 2023[100] Store Operations - System sales increased by 5% year-over-year, driven by an 8% contribution from net new store openings, partially offset by a decline in same-store sales[1] - The total number of stores reached 15,423, with 10,931 KFC and 3,504 Pizza Hut locations, adding a net of 779 stores during the period[1] - Same-store sales reached 97% of the prior year's level, despite strong performance in the same period last year[1] - The company plans to open approximately 1,500 to 1,700 new stores in fiscal year 2024[78] - The number of self-operated restaurants increased by 13% to 13,278 from 11,747 year-over-year[77] Shareholder Returns - Yum China returned nearly $1 billion to shareholders through stock buybacks and cash dividends, exceeding the total for the entire year of 2023[2] - The company paid a cash dividend of $0.26 per share for the fiscal year ending December 31, 2023[10] - The estimated cash dividend of $0.16 per share for Yum China common stock totals approximately $61 million, payable on September 17, 2024[59] - The board authorized an increase in the stock repurchase program by $1 billion, totaling $3.4 billion[111] Cash Flow and Liquidity - Cash generated from operating activities for the six months ended June 30, 2024, was $843 million, down from $924 million in the same period of 2023, representing a decrease of 8.8%[8] - Cash and cash equivalents decreased to $1,043 million as of June 30, 2024, from $1,128 million as of December 31, 2023, a decline of 7.5%[9] - The total cash and cash equivalents reported as of June 30, 2024, is $1.305 billion, indicating a strong liquidity position[61] Capital Expenditures and Investments - The company reported a capital expenditure of $358 million for the six months ended June 30, 2024, compared to $332 million in the same period of 2023, reflecting an increase of 7.8%[8] - Capital expenditures for the fiscal year 2024 are expected to range between $700 million and $850 million[110] - The company completed the acquisition of a 28% stake in Hangzhou Beverage for $255 million, gaining control of Hangzhou KFC with approximately 60% ownership[15] Debt and Liabilities - Total liabilities increased to $5,086 million as of June 30, 2024, compared to $4,912 million as of December 31, 2023, marking an increase of 3.5%[9] - The company reported short-term bank borrowings of $416 million as of June 30, 2024, significantly up from $168 million as of December 31, 2023[39] - The company's debt-to-equity ratio was 6.4% as of June 30, 2024, compared to 2.4% as of December 31, 2023[115] Revenue Breakdown - Company restaurant revenue for KFC was $4,120 million and for Pizza Hut was $1,137 million, totaling $5,289 million[25] - The company reported revenue from external customers for KFC at $4,244 million and for Pizza Hut at $1,135 million for the six months ended June 30, 2024, totaling $5,637 million[54] - Franchise fee income amounted to $46 million, with KFC contributing $32 million and Pizza Hut $4 million[25] Operational Efficiency - The company has a centralized procurement system for most food and packaging materials, which enhances operational efficiency and revenue generation[22] - The company recognized unrealized gains from its investment in Meituan of $16 million for the six months ended June 30, 2024, compared to a loss of $29 million for the same period in 2023[18] Tax and Regulatory Matters - The company continues to monitor regulatory developments related to the Corporate Alternative Minimum Tax (CAMT) and its potential impact on financial statements[51] - The company is undergoing a tax audit by Chinese tax authorities regarding transfer pricing arrangements, which may have a significant adverse impact on its financial condition and cash flow if additional taxes are assessed[105] Market Position and Strategy - Yum China Holdings, Inc. operates 15,423 restaurants across over 2,100 cities in China as of June 30, 2024, making it the largest restaurant company in the country by system sales[70] - KFC is the leading fast-food brand in China, with 10,931 restaurants operating in over 2,100 cities as of June 30, 2024[70] - The company believes there are significant further expansion opportunities within China, focusing on both existing and new cities[70] Impairment and Asset Management - The company recognized impairment charges of $7 million for restaurant-level assets for the six months ended June 30, 2024, compared to $14 million for the same period in 2023[50] - The company utilizes a two-step impairment loss measurement for long-term assets under US GAAP, which may differ from the one-step approach under IFRS[68]
百胜中国(09987) - 2024 - 中期业绩