Yum! Brands Inc. (NYSE: YUM)

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UofT Engineering Finance Club Energy and Mining Sector. Yum! Brands Inc. (NYSE: YUM). Lead Analyst: Alex Lee. Company Description. Initially Tricon Global, created in 1997 as a spin-out from PepsiCo, owner of KFC, Pizza Hut and Taco Bell. Changed to Yum! Brands in 2002 - PowerPoint PPT Presentation

Transcript of Yum! Brands Inc. (NYSE: YUM)

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Yum! Brands Inc.(NYSE: YUM)Lead Analyst: Alex LeeUofT Engineering Finance ClubEnergy and Mining Sector12Company DescriptionInitially Tricon Global, created in 1997 as a spin-out from PepsiCo, owner of KFC, Pizza Hut and Taco Bell. Changed to Yum! Brands in 2002Yum! Brands has a lifetime contract with PepsiCo, they serve Pepsi beverages

US growth has slowed due to market saturationTargeting international growth, most worldwide units as of 201023Company Description

34Company DescriptionHeadquarters: Louisville, Kentucky, United StatesOperates in over 110 countries and territories outside the US and China378,000 employeesChina operating profit more than doubled in the last 3 years to $755 million24 years since first KFC in China, built up their supply chain and distribution system quickly

45Chairman & CEOChairman & CEO: David C. NovakAlso served as Chief Operating Officer of Pepsi-Cola North AmericaHas been an Independent Director of JPMorgan Chase & Co. since 2001

56Chairman & CEO, ChinaChairman & CEO of Yum! Brands China Division: Jingshyh "Sam" SuAppointed May, 2010Also Vice Chairman of the Board at Yum! BrandsPreviously served as President of the China Division since 1997

67Basic FiguresStock Price: 53.74 (49.24)EPS: 2.55P/E Ratio: 21.04Beta: 0.98Market Capitalization: 24.75B

7As on February 28Competitors

89Additional Ratios

High leverage: S&Ps (BBB-), Moodys (Baa3)Comparatively high Return on Equity

9As on February 210Revenue GrowthFiscal third-quarter profit grew 7.3% thanks to continued strong sales in Chinese marketHigher costs and weak U.S. demand erased much of the company's international growth

Annual DataQuarterly Data1011News & MediaJ.P. Morgan recently reported YUM as Overweight, with a $65 target. Also YUM better for short term.Taco Bell (60% of US earnings) lawsuit closed in April3700:1300 = YUM:MCD units in ChinaMCD plans to open a restaurant every day in China for the next three to four yearsYUM looking to buy Chinas Little Sheep chain (now owns 27%)Chinas economy slowing but inflation still rising

1112Financial Statements

1213Financial Statements

Operating Profits1314Macro Effects

Dropped significantly in last few months, similar to market

1415Competition (1yr)

1516Analyst Predictions

1617Team RecommendationTop Three Reasons to BUY:

1718

Questions or Comments?18