Yum’s Digital Strategy and Global Reach Provide Strong Long-Term Growth Prospects

The restaurant industry has changed a lot in recent years, but we remain encouraged by the ability of the largest operators, including Yum Brands, to accelerate critical investments in e-commerce platforms, delivery integration, and technological solutions that meet the evolving demands of the modern restaurant consumer. Recent acquisitions demonstrate the emphasis the firm has placed on digital enhancements, with more than 50% of global systemwide sales now coming through digital channels, which we expect to remain integral to Yum's strategic playbook. The firm provides its digital tools to franchisees effectively at cost, strengthening franchise unit economics and helping drive its compelling unit development flywheel. With margins on franchise revenue often above 90%, this approach strikes us as appropriate.