YUM CHINA-百胜中国(09987) - 2023 - 年度业绩

Financial Performance - Total revenue grew by 15% to $10.98 billion, or 21% excluding foreign currency translation effects[2] - Operating profit increased by 76% to$ 1.1 billion, with adjusted operating profit also growing by 77%[2] - Earnings per diluted share rose by 89% to $1.97, with a growth rate of 101% excluding special items[2] - Net profit for 2023 was$ 901 million, up 88.5% from $478 million in 2022[15] - The company reported a diluted earnings per share of$ 1.97 for 2023, compared to $1.04 in 2022, marking an increase of 89.4%[14] - The company reported a net profit of$ 2,105 million for the year ended December 31, 2023, compared to $2,191 million in 2022, a decrease of 3.93%[18] - The company reported a net profit impact from special items of$ 15 million in 2023, up from $4 million in 2022[163] - The company reported a net income of$ 405 million for the year, which is a decrease of 31% from the previous year[137] Revenue Sources - Digital order revenue exceeded $9.2 billion, accounting for approximately 89% of restaurant revenue[2] - Total revenue from external customers for KFC was$ 8,240 million and for Pizza Hut was $2,246 million in 2023, contributing to a total revenue of$ 10,978 million[116] - Franchise fee income increased to $89 million in 2023 from$ 81 million in 2022, but decreased from $153 million in 2021[58] - The total revenue for the company in 2023 was$ 10,978 million, a 15% increase from $9,569 million in 2022[157] - The total revenue for the company in 2023 was reported at$ 11.945 billion, with a net profit of $4.338 billion[141] Store Operations - System sales increased by 21% year-over-year, driven by a 9% net new store contribution and a 7% same-store sales growth[2] - Total number of stores increased by 13%, with a net addition of 1,697 stores, reaching a total of 14,644 stores[2] - As of December 31, 2023, KFC operates 10,296 stores in China, with ownership stakes of 58% in Shanghai, 70% in Beijing, 83% in Wuxi, 92% in Suzhou, and approximately 60% in Hangzhou[19] - As of December 31, 2023, there are 3,312 Pizza Hut restaurants in China[20] - The company plans to open approximately 1,500 to 1,700 new stores in 2024[160] Membership and Customer Engagement - Membership for KFC and Pizza Hut combined reached over 470 million, a 14% increase year-over-year, with member sales accounting for 65% of system sales[2] - KFC's membership program reached over 440 million members by the end of 2023, accounting for approximately 64% of system sales[169] - Pizza Hut's membership program reached over 150 million members by the end of 2023, also accounting for approximately 66% of system sales[175] Audit and Compliance - The company is currently undergoing a transfer pricing audit by the State Taxation Administration of China for related party transactions from 2006 to 2015, with a likelihood of maintaining its tax status exceeding 50%[7] - The audit procedures included evaluating the design and operating effectiveness of internal controls related to the transfer pricing audit process[7] - The auditors aim to obtain reasonable assurance that the consolidated financial statements are free from material misstatement due to fraud or error[11] - The company continues to defend its transfer pricing arrangements amid ongoing audits by tax authorities, which may have significant financial implications[114] Capital Expenditures and Investments - The company incurred capital expenditures of$ 710 million in 2023, compared to $679 million in 2022[16] - The company plans to utilize operational cash flow and existing funds to meet future cash needs, including capital expenditures and shareholder returns[197] - The company expects capital expenditures for the fiscal year 2024 to be between$ 700 million and $850 million, focusing on store network expansion and digital infrastructure investments[197] Shareholder Returns - Shareholder returns through stock buybacks and cash dividends totaled$ 833 million, an increase of 25%[2] - The company declared a cash dividend of $0.48 per share for the fiscal year 2023[18] - Cash dividends paid to shareholders were$ 216 million in 2023, up from $202 million in 2022, with a declared dividend of$ 0.16 per share for 2024[198] Taxation and Regulatory Matters - The effective tax rate for 2023 was 26.9%, compared to 30.1% in 2022, reflecting changes in tax regulations and the impact of foreign operations[108] - The company is monitoring the implications of the new offshore income exemption (FSIE) regime in Hong Kong, effective January 1, 2023, which may affect certain income streams[107] - The company anticipates potential tax liabilities related to indirect asset transfers in China, which could significantly impact financial performance[119] Financial Position - Total assets increased to $12,031 million in 2023 from$ 11,826 million in 2022, representing a growth of 1.73%[17] - Total liabilities increased to $4,912 million in 2023 from$ 4,666 million in 2022, reflecting a growth of 5.27%[17] - The company has significant short-term and long-term cash needs totaling $3,433 million as of December 31, 2023, with$ 864 million due within one year[200] Future Outlook - The company expects to recognize $106 million in revenue from contract liabilities in the next 12 months[60] - The company provided guidance for the next fiscal year, projecting revenue growth of approximately 6%[137] - Future guidance suggests a revenue growth target of 10% for the next fiscal year[142] - The company plans to continue expanding its market presence and investing in new product development to drive future growth[165]