YUM! BRANDS 2003 ANNUAL CUSTOMER MANIA REPORT

More documents

Recommendations

Info

Dear Partners, I’m pleased to report 2003 was a year wherewe showed the underlying power of our global portfolio ofleading restaurant brands. With continued profitable internationalexpansion led by dynamic growth in China, combinedwith strong momentum at Taco Bell in the United States, weachieved 13% earnings per share growth prior to special items.This growth was achieved in spite of a challenging worldwide environment which included warin Iraq, SARS in Asia, and a generally soft economy the first half of the year. Highlights includeover $1 billion in operating profit, over $1 billion in cash from operating activities, and nearly$1 billion in franchise fees. In so doing, we once again achieved one of the industry’s leadingreturns on invested capital at 18%. After paying off $2.6 billion in debt the past six years, wenow have the power of an investment-grade quality balance sheet. Given this strong performanceand increasing financial strength, our share price climbed 42% in 2003, and our annual returnto shareholders is 14% since becoming a public company in 1997.Going forward, we are quite confident we can continue to achieve our goals of growing ourearnings per share at least 10% each year. We have three powerfully unique growth opportunitiesthat differentiate us from our competition. After reading this report, I hope you’ll agreethat we are NOT YOUR ORDINARY RESTAURANT COMPANY.Let me explain why we think so.#1. Driving Profitable GLOBAL GrowthOn the international front we have an undeniable competitive advantage andundeniable growth opportunity with two global brands, KFC and Pizza Hut.This year we set another record as we opened 1,108 new restaurants outsidethe United States. That’s the third year in a row we’ve opened 1,000 or more.Yum! Restaurants International is now our largest and fastest growing division, generating$441 million in operating profit and 22% growth in 2003. To put this in perspective, the internationalteam contributed $172 million in 1997, excluding charges for facility actions.The root of this exciting growth stems from the competitive advantage of the tremendousinfrastructure we already have in place. Today, we have strong local teams around the world,operate in over 100 countries with established supply chains, and have nearly 600 internationalfranchisees.Table of ContentsInfc Dear Partners7 Yum! Dynasty Model8 Global Powerhouse10 Yum! Restaurants Internationalcontinues to be our Growth Engine!12 Brand Power x514 Taco BellThink Outside the Bun16 Pizza HutGather ’Round the Good Stuff18 KFC C What’s Cookin’20 Long John Silver’s/A&W22 Power of Choice24 Customer Mania Power26 100% CHAMPS with a Yes!28 Running Great Restaurants29 Yum! At-a-glance30 Global Facts31 Unit Information32 Power of Results:Yum! Financial Highlights33 FinancialsInbc Power of Giving Back
“power”ofgiving backHARVESTAt Yum! Brands, we believe that the power of giving back to the community is making a differencein the lives of our customers and their families. While we commit ourselves to making adifference by financially supporting hundreds and hundreds of charities across the globe, ourefforts are primarily focused on nourishing the bodies, minds and souls of children in need. Wedo this through programs dedicated to hunger relief, daycare subsidies, reading incentives andmentoring at-risk teens. From Europe to Asia to South America, we’re committed to improvingthe lives of the customers we serve.Here’s a brief snapshot of the work that is underway:Nourishing Bodies: Yum! Harvest In America alone, one in ten children under the age of five runsthe risk of going to bed hungry every night. One in ten. So we decided to do something about thisand have created the world’s largest prepared food recovery program. We now donate millions ofpounds of prepared food to the hungry. Food that has nutritional value and will provide nourishmentto those most in need, the underprivileged.Nourishing Young Minds: Pizza Hut’s Book It! For nearly 20 years, Pizza Hut has provided anincentive for elementary aged children to learn to read. More than 22 million students a year, in900,000 classrooms, participate in Book It! The program is relied on year after year by teachersin 50,000 schools — nearly 70% of the nation’s elementary schools — so that young minds arenourished with books.Nourishing Souls: KFC’s Colonel’s Kids With more and more double-income and single-parenthouseholds, finding safe, affordable high-quality child care has become an increasing burden.That’s why KFC established the Colonel’s Kids Charity. Today, we help fund extended-hour andinfant/toddler child care programs across the country for the millions of people who work “afterhours” or on weekends. Since 2000, more than $3 million has been awarded to YMCA Child CareCenters nationwide.Taco Bell’s TEENSupreme Through a unique partnership with the Boys & Girls Clubs of America,Taco Bell has established a mentoring program for at-risk teens, offering a safe haven and recreationalactivities to keep kids off the street. To date, over $13 million has been donated to theBoys & Girls Clubs for TEENSupreme programming.
Page 1: YUM! BRANDS 2003 ANNUAL CUSTOMER MA

YUM! BRANDS 2003 ANNUAL CUSTOMER MANIA REPORT

Create successful ePaper yourself

Delete template?

Save as template?