Strategic acquisition to enable KFC to accelerate growth strategy in large and growing UK and Ireland chicken market

Yum! Brands’ KFC Division today announced that it has entered into a definitive agreement to acquire over 200 KFC restaurants from EG Group, the company’s largest KFC franchisee in the UK and Ireland.

The transaction represents a significant opportunity to accelerate KFC’s growth strategy in the large and growing UK and Ireland chicken market, with high average unit volumes and robust margins. The experienced KFC UK management team, which currently operates a leading set of 50 high-performing company-owned restaurants across the UK and Ireland, will focus on delivering an enhanced customer experience and deploying its digital strategy to drive higher unit volumes and market share growth.

KFC UK and Ireland has a strong track record of consistent growth that has continued this year, with system sales up 7% and same-store sales up 5% across its 1,040 restaurants. Since 2018, KFC has opened 200 new restaurants across the UK and Ireland, and with the market demonstrating renewed potential since the start of 2023, KFC has previously announced plans to open a further 500 restaurants across the market by 2030.

Once completed, all of EG’s KFC UK and Ireland business – over half of which is made up of drive-thrus – and 7,800 team members will come under KFC UK and Ireland management. This acquisition will cement the compelling leadership position that KFC has built across the UK and Ireland over many years – allowing the business to drive growth and gain market share.

Commenting on the transaction, Sabir Sami, KFC Division Chief Executive Officer, said: “The KFC business is a powerhouse for Yum! globally and the UK and Ireland is one of our strongest markets. Over the past five years, we’ve secured our leadership position within the UK and Ireland chicken market, opening 200 new restaurants, and we’re now close to being a £2 billion business in the UK, thanks to our extremely talented local management team. We’re pleased to add these restaurants to our equity portfolio, in a market where we are well placed to drive strong growth while also making further digital and strategic progress.”

Meg Farren, Managing Director of KFC UK and Ireland, added: “EG has played an important role in helping KFC expand its footprint across the UK and Ireland, and the KFC brand has been a big part of EG’s own growth in recent decades. With the market for high-quality, great-tasting chicken growing all the time, we see a big opportunity to capitalize on our leadership position and to unlock new value for all our stakeholders in the UK and Ireland, especially our customers and the communities we’re so proud to serve. On behalf of all of us on the management team, I want to welcome EG’s KFC restaurant team members even closer into the KFC family.”

Zuber Issa and Mohsin Issa, CBE co-founders and co-CEOs of EG Group, said: “We are proud to have been a strategic partner of KFC in the UK and Ireland, playing an important role in helping the brand expand its footprint. Now is the right time to hand the baton to the KFC leadership team to continue to grow the brand in the UK. This is the latest transaction in our significant deleveraging this year – to put in place a sustainable capital structure. I would like to thank all the colleagues who have helped deliver such exceptional brand standards and customer service over recent years, including during the COVID-19 period."

Yum! anticipates finalizing the transaction by the end of the first half of 2024. The transaction will be funded from Yum!’s cash flows and is expected to have an immaterial impact on Yum!’s 2024 financial results. With this acquisition, Yum! Brands maintains its highly efficient asset-light strategy including a global restaurant base that’s predominately franchisee-owned.

About KFC UK & Ireland

KFC is the leading fried chicken brand in the UK, famous for its finger lickin’ Original Recipe chicken created by Colonel Harland Sanders in 1952. The first KFC restaurant in the UK opened in Preston in 1965. KFC’s chicken is delivered fresh from farm to restaurant in 48 hours. It’s prepared carefully by hand in-restaurant by trained cooks, using the very best quality chicken reared to strict welfare standards. Today KFC operates over 1,000 restaurants across the UK and Ireland with 27,000 team members and is close to being a £2billion business in the UK and Ireland. For more information, please visit: https://www.kfc.co.uk/about-kfc

About KFC

KFC is a global chicken restaurant brand with a rich, decades-long history of success and innovation. It all started with one cook, Colonel Harland Sanders, who created the Original Recipe more than 80 years ago, a list of 11 secret herbs and spices scratched out on the back of the door to his kitchen. Today, while honoring our heritage, we remain committed to modernizing the colonel's vision, by serving feel-good food, at scale, through inclusive, equitable and sustainable business practices. We continue to follow his formula for success, with real cooks breading and freshly preparing our delicious chicken by hand in more than 29,000 restaurants in nearly 150 countries and territories around the world. KFC is a subsidiary of Yum! Brands, Inc. (NYSE: YUM.)

About Yum! Brands

Yum! Brands, Inc., based in Louisville, Kentucky, and its subsidiaries franchise or operate a system of over 57,000 restaurants in more than 155 countries and territories under the company’s concepts – KFC, Taco Bell, Pizza Hut and the Habit Burger Grill. The Company's KFC, Taco Bell and Pizza Hut brands are global leaders of the chicken, Mexican-style food, and pizza categories, respectively. The Habit Burger Grill is a fast casual restaurant concept specializing in made-to-order chargrilled burgers, sandwiches and more. In 2023, the KFC, Taco Bell and Pizza Hut brands were ranked in the top five of Entrepreneur’s Top Global Franchises Ranking. In addition, in 2023 Yum! Brands was included on the Bloomberg Gender-Equality Index; Forbes’ list of America’s Best Employers for Diversity; and Newsweek’s lists recognizing America’s Most Responsible Companies, America’s Greatest Workplaces for Diversity, America’s Greenest Companies and America’s Greatest Workplaces for Women. In 2022, the Company was named to the Dow Jones Sustainability Index North America.

Cautionary Statement Regarding Forward-Looking Statements

Certain statements in this communication contain “forward-looking statements.” Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. Forward-looking statements are based on current expectations, estimates, assumptions or projections concerning future results or events, including, without limitation, the projected closing date for the transaction, the anticipated benefits of the transaction, and the future earnings and performance of Yum! Brands, KFC or any of their businesses. Forward-looking statements are neither predictions nor guarantees of future events, circumstances or performance and are inherently subject to known and unknown risks, uncertainties and assumptions that could cause actual results to differ materially from those indicated by those statements. We cannot assure you that any of the expectations, estimates or projections expressed herein will be achieved. Numerous factors related to the transaction could cause actual results and events to differ materially from those expressed or implied by forward-looking statements, including, without limitation: the ability to achieve the synergies and value creation contemplated by the transaction; KFC’s ability to promptly and effectively integrate the acquired businesses; the risk that revenues following the transaction may be lower than expected; the risk that operating costs and business disruption (including, without limitation, difficulties in maintaining relationships with employees and suppliers) may be greater than expected; the assumption of unexpected risks and liabilities. The forward-looking statements included in this communication are only made as of the date of this communication and we disclaim any obligation to publicly update any forward-looking statement to reflect subsequent events or circumstances. You should consult our filings with the Securities and Exchange Commission (including the information set forth under the captions “Risk Factors” and “Forward-Looking Statements” in our most recently filed Annual Report on Form 10-K and Quarterly Report on Form 10-Q) for additional detail about factors that could affect our financial and other results.

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