Arab Today, arab today kfc owner yum brands to split off china business
Last Updated : GMT 16:24:29
Arab Today, arab today
Arab Today, arab today

KFC owner Yum Brands to split off China business

Arab Today, arab today

Arab Today, arab today KFC owner Yum Brands to split off China business

Customers dine at a KFC restaurant in Beijing
New York - AFP

Yum Brands, the owner of KFC, Pizza Hut and Taco Bell, announced Tuesday it is splitting off its $6.9 billion China business into a separate company.

The spinoff will be named Yum China, and focus on the US company's huge but struggling restaurant business in the country.

The rest of the global business, which currently counts 41,000 restaurants in more than 125 countries, will remain with the existing Yum, which will evolve into a "pure play" franchisor, with nearly all of its restaurants licensed to franchise holders.

"Following the separation, each standalone company will be able to intensify focus on its distinct commercial priorities, allocate its own resources to meet the needs of its business, and pursue distinct capital structures and capital allocation strategies," said Yum chief executive Greg Creed in a statement.

"This will provide a clear investment thesis and visibility to attract a long-term investor base suited to each business."

The move came after Yum's 6,900 KFC and Pizza Hut restaurants in China have struggled for two years with slowing economic growth, challenging consumer tastes and a health scare after a nearly three-decade buildup.

The company was hammered by a tainted meat scandal in China in mid-2014, which hit the bottom line of the entire company.

Global revenues grew just one percent last year to $13.28 billion, and net income fell four percent to $1.05 billion.

But revenue in the third quarter, ended September, was up two percent from a year earlier to $3.4 billion, and net income rose 4 percent to $421 million.

Yum said the China spinoff will operate as a country franchise of Yum Brands, which "will therefore continue to benefit from China's growth," the company said.

Under a mainly Chinese management team led by CEO Mickey Pant, Yum China has "a compelling growth profile in one of the world's fastest-growing restaurant markets," it added.

The new unit will have strong cash flow, little debt, and a strong market position. KFC, or Kentucky Fried Chicken, is the top foreign restaurant brand in China, with 4,900 outlets in more than 1,000 cities.

The group also has some 1,400 Pizza Hut Casual Dining restaurants, and 300 Pizza Hut Home Service pizza delivery shops.

The new company expects to open a total of 700 new restaurants this year and, long term, targets having more than 20,000 across China.

The China business has also been hit by the poor performance of a chain of Mongolian-style hot-pot restaurants it took over in 2012, Little Sheep.

In the fourth quarter of last year Yum wrote off $361 million on Little Sheep losses.

As for Yum Brands, the company said it will ratchet up debt to mirror the financial stance of rivals and plans to return "substantial capital to shareholders in conjunction with the separation."

Yum Brands meanwhile will realign management by restaurant brand rather the geographic region.

Yum shares jumped 4.1 percent to $74.67 in opening market trade after the announcement.

arabstoday
arabstoday

Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

Arab Today, arab today kfc owner yum brands to split off china business Arab Today, arab today kfc owner yum brands to split off china business

 



Arab Today, arab today

Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

Arab Today, arab today kfc owner yum brands to split off china business Arab Today, arab today kfc owner yum brands to split off china business

 



Arab Today, arab today Designer prepared new set of ornaments

GMT 02:45 2017 Wednesday ,28 June

Designer prepared new set of ornaments
Arab Today, arab today France defies terrorism through tourism

GMT 15:18 2017 Saturday ,20 May

France defies terrorism through tourism
Arab Today, arab today Mai Al-Jeddawi presents décor ideas for Ramadan
Arab Today, arab today
Arab Today, arab today

GMT 10:39 2017 Monday ,26 June

Authorities release Assala under conditions

GMT 09:49 2017 Tuesday ,02 May

Girl barred from Malaysia chess competition

GMT 08:48 2017 Saturday ,06 May

Climate science: Bad news gets worse

GMT 16:25 2017 Sunday ,04 June

“Suhoor” is basic meal for fasting

GMT 06:31 2015 Thursday ,04 June

Pluto's unruly moons

GMT 11:09 2017 Sunday ,25 June

HUAWEI P10 the ‘guru’ of portrait shots

GMT 17:59 2017 Monday ,12 June

Designer Rania Adel reveals her new collection
Arab Today, arab today
Arab Today, arab today
 
 Arab Today Facebook,arab today facebook  Arab Today Twitter,arab today twitter Arab Today Rss,arab today rss  Arab Today Youtube,arab today youtube  Arab Today Youtube,arab today youtube
arabstoday arabstoday arabstoday arabstoday
arabstoday arabstoday arabstoday
arabstoday
بناية النخيل - رأس النبع _ خلف السفارة الفرنسية _بيروت - لبنان
arabstoday, Arabstoday, Arabstoday