YRI: Long runway for growth. Micky Pant, CEO, YRI

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Clemence Hart
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1 YRI: Long runway for growth Micky Pant, CEO, YRI

2 Forward Looking Statement This presentation will include forward-looking statements that reflect management s expectations based on currently available data. However, results are subject to future events and uncertainties, which may cause actual results to differ materially. The information in this presentation related to projections or other forward-looking statements is subject to the safe harbor statement posted on our Web site at YRI UBS Investor Conference March 2013 Page 2

3 Yum! Restaurants International 60% of world s population Present in 120+ countries & territories 14,600+ restaurants * ; 90% franchise ~$1B expected royalty stream in 2013 All numbers in this presentation are rounded and approximate (*) Includes license units YRI UBS Investor Conference March 2013 Page 3

with high quality management worldwide Decentralized structure encouraging local innovation

4 YRI: Positioned for growth KFC and Pizza Hut: Top 100 best global brands * Dominant in emerging markets Low-risk franchisee led model Rio de Janeiro, Brazil 20 regional offices with high quality management worldwide Decentralized structure encouraging local innovation Seongnae, Korea (*) Interbrand, Best Global Brands 2012 YRI UBS Investor Conference March 2013 Page 4

5 and consistently delivering growth YRI Profits ($MM) %+ CAGR Excludes the benefit of Mexico VAT exemptions of $35MM, $38MM and $4MM in respectively YRI UBS Investor Conference March 2013 Page 5

6 Powerful franchise based royalty stream Franchise and License Fees ($MM) % CAGR YRI UBS Investor Conference March 2013 Page 6

2012: Another strong year for YRI $715MM operating profit, 950 new units Emerging markets driving growth Record new units; pipeline even stronger Re-allocated RSC

7 2012: Another strong year for YRI $715MM operating profit, 950 new units Emerging markets driving growth Record new units; pipeline even stronger Re-allocated RSC G&A to drive field growth Istanbul, Turkey Re-allocation of equity to emerging markets in progress Jakarta, Indonesia YRI UBS Investor Conference March 2013 Page 7

8 Biggest sales growth driver: emerging markets 2012 SSSG 7% Accra, Ghana Emerging 1% Developed Sao Paulo, Brazil 2012 System Sales ~$7B ~$10B Ho Chi Minh, Vietnam YRI UBS Investor Conference March 2013 Page 8

9 Emerging markets also driving profit growth Profit CAGR 23% Cuernavaca Zapata, Mexico 6% Emerging Developed Bangkok, Thailand 2012 YRI Profits HQ G&A allocated to regions based on system sales YRI UBS Investor Conference March % 50% Buenos Aires, Argentina Page 9

Continue with aggressive growth 2011 2012

10 Achieved record new unit development YRI New Unit Development Forecast: Continue with aggressive growth YRI UBS Investor Conference March 2013 Page 10

11 Significant development opportunity ahead Consuming Class Penetration (# Yum Units / MM Consuming Class) US Malaysia South Africa Thailand YRI Indonesia Russia Brazil # Yum Units MM Consuming Class 18, , , YUM units include license units YRI UBS Investor Conference March 2013 Page 11

KFC fueled by strong economics 3.0 Sample Cash Payback Period (Years) 2.7 2.9 3.0 2.

12 KFC fueled by strong economics 3.0 Sample Cash Payback Period (Years) Wisbech KFC UK Kuala Lumpur, Malaysia Malaysia Indonesia Philippines Russia S. Africa Russia numbers are for mall locations YRI UBS Investor Conference March 2013 Page 12

PH Delivery model unleashing growth PH Delco Net Unit Growth 183 112 135 Asuncion, Paraguay Performance

13 PH Delivery model unleashing growth PH Delco Net Unit Growth Asuncion, Paraguay Performance Emerging Developed Cash Payback 2-3 yrs 4-5 yrs YRI UBS Investor Conference March 2013 Page 13

Krasnodar, Russia Aggressively investing in development

14 Update on key markets: Russia 30% SSSG in 2012 Rostik s to KFC: Process completed Brand building asset strategy Krasnodar, Russia Aggressively investing in development capability Moscow, Russia YRI UBS Investor Conference March 2013 Page 14

15 Update on key markets: UK Strong & well-established KFC and Pizza Hut businesses Pizza Hut Dine-in sale is complete Pizza Hut Delivery poised for growth New incentive approach as growth catalyst in delivery Birmingham, UK Cardiff Leckwith, UK YRI UBS Investor Conference March 2013 Page 15

launch of breakfast Potchefstroom, South Africa Continued expansion into rest

16 Update on key markets: South Africa Market leader KFC with SSSG of 11% in 2012 Equity leadership model equity investment fully integrated Successful national launch of breakfast Potchefstroom, South Africa Continued expansion into rest of Africa Kyalami, South Africa YRI UBS Investor Conference March 2013 Page 16

17 Update on key markets: Turkey Agreement signed, completion expected on April 1 st 74M people with young demographics High, consistent economic growth, ~9% GDP growth Istanbul, Turkey Long runway for growth for YRI Istanbul, Turkey YRI UBS Investor Conference March 2013 Page 17

18 Strengthening the model: Portfolio actions YRI Equity Units ~1,180 Units 40% Developed Emerging 60% 40% 60% years YRI UBS Investor Conference March 2013 Page 18

19 On track to become a $1B division YRI Profits Target CAGR $1,000MM 10%+ $715MM 57% 15%+ Emerging 50% Developed 50% 43% 5% profit figure allocates HQ G&A to regions based on system sales F YRI UBS Investor Conference March 2013 Page 19

Steve Schmitt Vice President, Investor Relations & Corporate Strategy

NEWS Steve Schmitt Vice President, Investor Relations & Corporate Strategy Yum! Brands Reports Second-Quarter EPS of $0.69, a Decline of 5%, Excluding Special Items; Expects Strong Second Half in China;