Ladies and gentlemen, thank you for standing by, and welcome to the Yum China 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. I must advise you that this conference is being recorded today, 24th April, 2017. I would now like to hand the conference over to Christy Zhu, Yum China Vice President for Finance and Investor Relations.
Thank you. Please go ahead.
Thank you, Siju. Hi, everyone. Thanks for joining our call on short notice. As you know, we recently announced a CFO transition plan. We just filed an 8 ks last Friday.
Following the resignation of CFO, Ted Stedham, we have appointed an Interim CFO effective 1st June, Jackie Lo. We have arranged this call to speak with you directly and address any questions you may have regarding this change. Joining me today are our CEO, Mickey Pent President and CEO, Joey Watt Ted Statham and Jackie Lo. We will start with some opening remarks and then move on to Q and A. Please note this conference call contains forward looking statements, which are subject to future events and uncertainties.
Our actual results may differ materially from these forward looking statements, so please consider these statements in conjunction with the cautionary statement included in our filings with the SEC. With that, let me turn it over the call to Mr. Mickey Pent, CEO of Yum China.
Thank you, Christy, and thank you, everyone, for joining in today's conference call. As Christy mentioned, last Friday, April 21, we announced the CFO transition plan with the approval of our Board of Directors. As a result of this, I'm pleased that Jackie Lo is going to be our interim CFO effective June 1, replacing Ted Stetham, who is resigning from Yum! China for personal reasons. In a moment, you will hear directly from Ted Stetham.
You will also hear from Jackie Loeb. And I wish to state that I have the utmost confidence in Jackie having worked closely with him over the past several months. I'm also delighted to be joined today by Juri Watt. As you know, since February, Juri has been the President and Chief Operating Officer of Yum! Channel, the responsibility for both KFC and for Pizza Hut.
I do wish to clarify, however, that the primary purpose of today's call is to look at the CFO transition arrangements and to answer your questions in that regard. So while Julie and I remain available for questions, I do wish to clarify that our comments regarding business, particularly the ongoing quarter or the rest of the year, will be limited strictly to the comments that we already made in our earnings call on April 50 or time, April 6 our time. We will be pleased to take questions, but the one thing I wish to reiterate as I hand over to Ted to make a comment, What I said at the Q1 earnings call is that we are facing our future in Yum China with increasing confidence, especially with regards to developing new units and to our profit prospects for the year. So with that, I would like to thank Ted for great work done over the last several months in making our company public and would invite him to make a brief comment.
Great. Thanks, Mickey. Good morning and good evening to all of you. I wanted to start by saying that I'm a huge believer in this company and in the opportunities that we have to grow our brands and to create value for our shareholders. We have a 30 year track record of success and I really believe that we have the best brands, the best people and the best culture in the world's biggest growth market in our industry.
And to me, this is what makes Yum China not only a great company, but also a great investment opportunity. As many of you know, I am an American and after considering several personal circumstances and family priorities, I decided to return home to the U. S. At the end of the school year. I have the utmost confidence in Jackie Lo and in our entire finance team, and I'll be working closely with them to ensure a seamless and smooth transition.
Jackie and I are both committed to ensuring that all of the key projects that we're working on remain on track and are completed as planned. In closing, I'm extremely confident that under Mickey and Joey's leadership, our company's future has never been brighter.
Thank you very much, Ted. I know you'll have questions, but I would like to take the opportunity to hear from Jackie Lo, who's taking over the role as Insurance CFO from June 1. And Jackie, as you introduce your view of the role, could you also could I request you to also make some comments regarding your
Nikit. Let me quickly introduce myself. I'm currently the Principal Accounting Officer and Controller of Yum China, overseeing all accounting functions within the company. As Vice President in Finance, I also work closely with Pat on various finance functions, including our cash management plan. I joined Yum!
China in mid August 2016 and went through the spin off process. And prior to Yum China, I was an audit partner with Ernst and Young for 5 years and have a total of 17 years in the profession. 10 of those years were based in China, mainly in Shanghai and Shenzhen. I have extensive experience in working with U. S.
Listed companies and IPO candidates. The last 2 years with Shenzhen Yang, I was also the Deputy Leader of Capital Market Center in Asia Pacific, overseeing all client activities relating to U. S. GAAP, SEC reporting and soft compliance in the area. My major client at UI was Baidu, which I served as the lead audit partner for 5 years.
I truly appreciate the opportunity and trust from Mickey and the Board of Directors for me to take on this new role. Ted has set up a world class finance function, and we have many high caliber finance executives on the team. I'll work closely with each of them to continue driving the quality of our finance function and the growth of Yum! China. And over the next 5 weeks, I'll also work very closely with Tad to ensure a smooth transition.
Thank you very much, Christy. So can you coordinate questions?
Sure. Thanks, Mickey, and thanks, Ted and Jackie. Now we will open the floor for questions. We would like to take as many questions as possible. So would very much appreciate when you have a question, when you get in the queue, please limit to 2 questions or one question and one follow-up.
And Cedric, please can you start the Q and A session?
Certainly. Ladies and gentlemen, we will now begin the question and answer session. Your first question comes from the line of John Glass from Morgan Stanley. Please ask your question.
Hi, thanks. Good evening. Can you just clarify Mickey or Jackie, is this a temporary interim position and you'll seek a new CFO? Or Jackie, do you have this job going forward after the transition? And if you could also comment if it is a transition if it is a transition to a permanent role, how long that takes to find a
new CFO?
John, Ted made me aware of his intention to resign. And within a day of that, we called our Board of Directors meeting and got their approval to appoint Jackie as the interim CFO. I think at this time, we retain all options as to whether who the final candidate for this role will be. It is our intention with the audit committee of our Board of Directors and with the full Board to put up all options, both internal and external. And we will let you know just as that progresses.
What I wish to assure you, however, is that I see this as a very smooth transition. We're in no rush to take a decision. And that I see Jackie has been perfectly capable of executing the functions, especially if Ted is going to be with us for the 1st 2.
Thank you. And if I could just follow-up, Mickey, when you look at your senior management team and the tenure, one, do you expect other potential transitions like this? And particularly, given this I think there is some mix of Chinese nationals versus expatriates on the team. Do you see that risk going forward? Did you feel like right now you've got folks who are committed to remaining in the roles longer term?
John, I feel very satisfied of the capability of our senior management team. I do wish to reiterate the company pretty well. But those who don't, we have a tremendous depth of management. So while we often talk about our senior team, I would like to reiterate that we have very high levels of tenure and stability at all levels of this company, most importantly in our store management, store staff above that, leading up to market managers that run several 100 stores each. So I feel very confident in the stability of this company overall.
Having said that, we don't so much care about ratios of or local management. We're always seeking for the best possible person to do a particular role. At this time, as I stand, I feel very confident that this company will not suffer in any way due to instabilities, and I feel that the depth of management and the ongoing arrangements that we have are perfectly satisfactory.
Great. Thank you.
Thanks, John. Operator, can we take the next question, please?
Yes. Your next question comes from the line of Ann Ling from Deutsche Bank. Please ask your question.
Hi. Just want to check on both Jackie, now that you're the interim CFO, would like to check what is the current priority And Pat, personal, all the best and sad to see you leaving us. But we'd like to check with you, like you mentioned about like thinking about this cash management plan in second half of 1.7. So with your departure, would there be any delay in terms of like the change of such plan or how Ricky will be able to help you in terms of like going through this transition?
Hi, Ann. This is Jacky. I'll take your questions. Our top priority remains unchanged. So we'll continue to grow our same store sales by focusing on our core brand.
And also we'll continue to invest in new restaurant development and remodel to enhance customer experience. And also we will continue to focus on digital and delivery growth, the growth engine. And as we refinance, I work very closely with Tad on our capital structures and cash management plan and there will be no change in this area.
So we should expect something to be announced regarding the cash management in second half on-seventy?
I think we've been consistent with that, Ann. We had said that given the size of our cash as well as the ongoing cash generation, we take that responsibility very seriously. This is shareholder cash. And we are working on a comprehensive plan, which evaluates fully all available opportunities so that we can make any commitments that we can be sure to honor in the long term. We had signaled that this would be in the back half, and we will continue to keep you posted as we go along.
I would emphasize, emphasize, however, what Jackie and Ted both said, that the process of this transition is very smooth, and this transition should have no impact on the timing of our decisions regarding capital
Okay. Thanks.
Thank you. Thank you. Your next question comes from the line of Christine Tang from UBS. Please ask your question.
Hi, management. I think my question is the same as what Anne just mentioned. I think from investors' point of view, the key focus is really about how you plan to allocate the cash, how you plan to improve the efficiency of your capital structure? And to that, if management can add any colors, that will be very much appreciated.
Christina, I will hand over to Ted because he's been the closest to this entire functioning. I will, however, reiterate that I did not have this call, there would have been no change and there will be no change as a result of this move. So our diligence towards working on a very comprehensive capital management plan continues. It's always been a priority. The only reason we've not shared details is that we want to make it right and do it properly and take our Board of Directors through it.
So with that, I'll hand over to Ted.
Yes. Hi, Christine. I'd echo what Mickey said and what I said previously. This is it's definitely one of our top priorities and it's one that we are taking very seriously and we're doing very diligently. We have a whole team that's working on this project internally and there's several different phases of it.
One is the strategic review we've talked about. This is an important project for our company and it involves a lot of people. And Jackie has been involved in that since day 1. And we're also working on the capital allocation plan and there's a whole host of people in my finance team that have done it. And Jackie has been involved and we plan to continue to progress those.
And I think Jackie and I are absolutely committed and I'm personally committed to ensuring it's a smooth transition and that all of these projects stay on track. These are really important projects for our company and we're planning to keep them on track and on schedule.
I think just one follow-up comment from me. This is Mickey once again. This refers to the question that John Glass had raised as well as Anne as well as yourself, Christine, is that I and Joey Watts, who will closely work together on running the business, will be working extremely closely with Jackie in the future. I'm committed to Jackie's success and Jackie brings tremendous expertise. The reason why we made this appointment was we considered very carefully since a crucial position, but I have a lot of confidence in Jackie's ability.
And I think we're working in concert because as you know, capital return is not just a financial matter, it's also closely connected with the brand priority, how we strengthen our brands, how we invest behind the brands and what cash the brands are capable of generating. So we take that very seriously, and I'm very excited with the opportunity of working with Jackie. He's got extensive experience outside of our company, and I see that as a strength. Thank you.
Thank you.
For those of you who are on the call or if you want to e mail a question to me, that's fine too. If you have a question, you can do star 1 and we will wait to see if there are any additional questions.
Okay. Well, I think that John, Anne and Kristina are the key questions probably everybody has. So at this time, since there are no further questions, I wish you once again thank you Ted for the great work that you've done. I wish you all the very best. Wish you the very best, Jackie, and thank you all very much for the interest you've taken in our company.
As Christy mentioned, we continue to be open and available for your further questions. Look forward to interacting with you. So with that, thank you very much. Goodbye.