Yum China Holdings, Inc.

Ladies and gentlemen, thank you for standing by and welcome to YomChina 2020 Third Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode. There will be a presentation followed by a question-and-answer session, at which time, if you wish to ask a question, you will need to press star and 1 on your telephone. I must advise you that this conference is being recorded. I would now like to hand the conference over to your speaker today, Ms. Debbie Ding, thank you. Please go ahead.

Thank you, operator. Hello, everyone, and thank you for joining Young China's third quarter 2020 earnings conference call. Joining us on today's call are our CEO, Ms. Joey Wat, and our CFO, Mr. Andy Yang. Before we get started, I'd like to remind you that our earnings call and investor presentation contains forward-looking statements, which are subject to future events and uncertainties. Our actual results may differ materially from these forward-looking statements. All forward-looking statements should be considered in conjunction with the cautionary statement in our earnings release and the risk factors included in our filings with the FCC. This call also includes certain non-GAAP financial measures. You should carefully consider the comparable GAAP measures. Reconsideration of the non-GAAP and GAAP measures is included in our earnings release. Today's call includes three sections. First, Joey will provide an update regarding recent development. Then she will offer some highlights around our quarterly results. Andy will then cover the financial results and provide an update on our four-year outlook. Finally, we will open the call to questions. You can find the webcast of this call and a PowerPoint presentation which contains operational and financial information for the quarter on our IR website. Now I would like to turn the call over to Ms. Joey Wat, CEO of Yum China. Joey?

Thank you, Debbie. Hello, everyone, and thank you for joining us today. As I reflect on this challenging period, I want to thank our employees, our customers, our partners, and our shareholders for your continued trust in Yum China. Resilience is only proven when tested, and we certainly were tested. Following two challenging quarters, we delivered system sales growth for the third quarter. This is the result of the tireless dedication of our staff and partners, working to safely provide good food, great value and convenience for customers across our 10,000 plus stores. Hope fast, stay true. Throughout the COVID pandemic, we hold to our key operating disciplines. Food Safety, Employee Care, and Customer Focus guide our actions. In over 1,400 cities we operate, we provide employment, career progression, and a commitment to improving our local communities. We stay true to our culture of innovation, building on our leadership in digital and delivery. All these add to the resilience of Young China. We achieved much in 2020 despite the COVID pandemic. First, we opened our 10,000th store this quarter, marking a significant milestone. Secondly, our brands demonstrated innovation and execution excellence, capturing the shift to off-premise signing early. KFC and Pizza Hut pioneered content-less delivery in late January. We engaged with over 20,000 companies regarding corporate delivery. tapping into another segment of new customers. Pizza Hut celebrated its 30th anniversary by driving menu innovation, improving its takeaway and individual set offerings. Third, we formed a joint venture with Lavazza and opened the first flagship coffee shop in Asia. We will continue the journey together to explore the China coffee market. Fourth, we complete the acquisition of Huang Ji Huang, and formed a Chinese Dining Business Unit to tap the massive Chinese cuisine market opportunity. Last but not least, we listed on the Hong Kong Stock Exchange in September, becoming the first Delaware incorporated company to list on both NYSE and Hong Kong Exchange. This listing, in one of the most vibrant trading markets in Asia, bring investors closer to our consumers and partners. At the same time, we maintain our strong corporate governance and discipline. The young China of the future will have a much larger footprint across China. Stores will remain new or freshly remodeled. We will continue to serve innovative food across day parts and occasions. A portfolio of brands built organically and through a disciplined M&A process will target strong growth segments. This will be supported by key infrastructure whether in supply chain, logistics or digital marketing.