Financial Performance - Total revenue for the six months ended June 30, 2023, was $5.57 billion, an increase of 16% from $4.80 billion in the same period last year[1]. - Operating profit reached $673 million, a 147% increase from $272 million in the same period last year, driven by higher sales and improved profit margins[1]. - Net profit was $486 million, up 166% from $183 million year-over-year, primarily due to the increase in operating profit[2]. - Diluted earnings per share were $1.15, a 167% increase from $0.43 in the same period last year[2]. - Comprehensive income for the six months ended June 30, 2023, was $273 million, compared to a loss of $45 million in the same period last year[7]. - Cash generated from operating activities reached $924 million, up from $609 million year-over-year, indicating a 52% increase[8]. - Net profit for the six months ended June 30, 2023, was $527 million, a significant increase from $193 million in the same period of 2022, representing a growth of 173%[8]. - The company reported a net cash outflow from investing activities of $598 million, compared to $52 million in the previous year, highlighting increased investment activity[8]. - The company reported a decrease in net other expenses to $1 million for the six months ended June 30, 2023, compared to $49 million in the same period of 2022[37]. - The company reported a significant increase in user data, with active users growing by 10% year-over-year[70]. Revenue Breakdown - System sales increased by 24% year-over-year, with KFC and Pizza Hut growing by 24% and 23% respectively, excluding foreign currency effects[1]. - Same-store sales rose by 11% compared to the previous year, with KFC and Pizza Hut increasing by 11% and 10% respectively, excluding foreign currency effects[1]. - The company restaurant revenue was $5.29 billion, compared to $4.57 billion in the previous year[6]. - Revenue from company restaurants totaled $4,574 million, with KFC contributing $3,562 million and Pizza Hut $985 million for the six months ended June 30, 2023[27]. - Franchise fee revenue amounted to $46 million, with KFC generating $32 million and Pizza Hut $4 million during the same period[27]. - Revenue from transactions with franchise stores reached $182 million, with KFC at $21 million and Pizza Hut at $2 million[27]. - Other income was reported at $343 million, including $306 million from logistics and warehousing services[27]. Assets and Liabilities - Total assets as of June 30, 2023, amounted to $11,675 million, a slight decrease from $11,826 million at the end of 2022[9]. - Total liabilities decreased to $4,458 million from $4,666 million, showing a reduction of 4.5%[9]. - Shareholders' equity increased to $7,205 million from $7,148 million, indicating a growth of 0.8%[9]. - The company’s investment in equity accounted investees was $257 million as of June 30, 2023, down from $266 million as of December 31, 2022[40]. - The total fixed assets as of June 30, 2023, amounted to $4,493 million, a slight decrease from $4,586 million as of December 31, 2022[40]. - The goodwill balance as of June 30, 2023, is $2,282 million, down from $2,379 million as of December 31, 2022, reflecting a decrease of 4.1%[43]. Investments and Acquisitions - The company completed the acquisition of a 28% stake in Hangzhou Beverage for $255 million, gaining control of approximately 60% of Hangzhou KFC[16]. - The company has consolidated the financial performance of Hangzhou KFC since the acquisition date, reflecting its operational results in the financial statements[16]. - The company completed the acquisition of an additional 25% stake in Suzhou KFC for $149 million, increasing its ownership to 72% in Q3 2020[17]. - In December 2022, the company acquired an additional 20% stake in Suzhou KFC for $115 million, raising total ownership to 92%[17]. - The company has expanded its business by acquiring a controlling stake in a food delivery service provider, enhancing its delivery operations[12]. Shareholder Returns - The company repurchased $122 million in common stock during the period, down from $400 million in the previous year[8]. - The company paid cash dividends of $108 million on common stock, slightly up from $101 million in the same period last year[8]. - On July 31, 2023, the company announced a cash dividend of $0.13 per share, totaling approximately $54 million to be paid on September 18, 2023[65]. Operational Highlights - As of June 30, 2023, Yum China operates over 9,500 KFC stores in China, holding controlling interests of 58% to 92% in various regions[11]. - The company has over 3,000 Pizza Hut restaurants in China as of June 30, 2023[12]. - The number of self-operated restaurants increased by 12% to 11,747 as of June 30, 2023, compared to 10,461 in 2022[84]. - The company aims to open approximately 1,100 to 1,300 new stores in fiscal year 2023[84]. - The company has a membership program allowing registered members to earn points redeemable for products, with points typically expiring after 18 months[26]. Tax and Regulatory Matters - The actual tax rate for the six months ended June 30, 2023, was 27.0%, a decrease from 30.4% in the prior year, attributed to improved performance of several subsidiaries[57]. - The company continues to monitor regulatory developments related to the Corporate Alternative Minimum Tax (CAMT) and its potential impact on financial statements[57]. - The company is currently undergoing a transfer pricing audit by the Chinese tax authorities, which may lead to significant developments in the next 12 months[58]. - The company believes that any potential tax liabilities arising from the indirect transfer of assets in China may be significant due to a small tax base[63]. Future Outlook - The company plans to gradually phase out the COFFii & JOY brand and has already closed all related stores by March 2022[12]. - The company expects capital expenditures for the fiscal year 2023 to be between approximately $700 million and $900 million[116]. - The company anticipates continued uncertainty in the macroeconomic environment, with potential wage increases and gradual removal of VAT rebate policies impacting future performance[110]. - The company plans to use future cash primarily for operations and capital expenditures related to accelerating store network expansion and renovations, as well as increasing investments in digitalization, automation, and logistics infrastructure[115].
百胜中国(09987) - 2023 - 中期业绩