Yum Brands to return $13.5 billion to shareowners by 2019
By Lisa Baertlein
(Reuters) - Yum Brands Inc (YUM.N: Quote), owner of Pizza Hut, KFC and Taco Bell chains, said on Tuesday it will more than double returns to shareholders by 2019 as part of a program started last year, sending its shares up as much as 3.8 percent.
The company, which is spinning off its China division at the end of the month, now plans to expand its share buyback plan to $13.5 billion, including dividends.
It already has bought back about $5.5 billion shares as part of a previously announced $6.2 billion capital return program that has reduced its share count by about 16 percent.
Yum did not immediately have a breakdown on much of the extra returns would be from share repurchases and how much from dividends.
Executives say Yum Brands will be leaner and less exposed to the ups and downs of the restaurant business following the separation of Yum China and the sale of more company-owned restaurants to franchisees.
"It's about delivering higher growth with lower risk," Yum Brands Chief Executive Officer Greg Creed told Reuters in a telephone interview.
Yum said franchisees will own 93 percent of the nearly 36,000 Yum restaurants remaining in the company after the China unit is carved off. The combined company currently is 77 percent franchised, in part because Yum China owns most of its restaurants.
Yum Brands aims to have at least 98 percent of its restaurants owned by franchisees by the end of 2018, which will lower costs and increase its dependence on more stable franchise and license fees. Continued...