Jollibee Foods Corp. · PSE:JFC
Jollibee Foods — Q2 2024 Earnings Presentation
33 slides from Jollibee Foods's earnings presentation, Aug 15, 2024
Slide 1: Jollibee Foods Corporation Q2 H1 2024 Earnings Call
Jollibee Foods Corporation Q2 H1 2024 Earnings Call August 15th 2024
Slide 2: Reminder to Participants of JFC's Investor/Analyst Briefing
Reminder to Participants of JFC’s Investor/ Analyst Briefing: This earnings call may include forward-looking statements that are based on certain assumptions of Management and are subject to risks and opportunities or unforeseen events. Actual results could differ materially from those contemplated
Slide 3: Key Metrics Snapshot
Key Metrics Snapshot Key P&L Metrics Q2'24 Q2'23 G%vsLY Q1'24 QoQ% H1'24 H1'23 G%vsLY Revenue 67.2 60.8 10.6% 61.3 9.6% 128.5 115.9 10.9% Gross Profit 13.1 10.9 19.9% 11.2 16.7% 24.3 20.9 16.2% Operating Profit 5.1 4.0 26.8% 4.1 23.9% 9.2 7.6 20.6% EBITDA 9.8 8.3 18.4% 8.9 9.8% 18.8 15.9 18.2% Net I
Slide 4: Q2 SWS/SSS (RB) and Network Growth versus Industry Peers
Q2 SWS/ SSS (RB) and Network Growth versus Industry Peers SWS Store RB (%) Growth Growth JFC 7.4 12.1 5.1 Yum Brands -1.0 3.0 5.0 Yum China -4.0 4.0 13.4 McDonald's -1.0 -1.0 3.9 Restaurant Brands 1.9 5.0 4.0 Starbucks** -3.0 -1.0 6.1 Chipotle 11.1 18.2 7.4 Darden*** 0.0 6.8 6.1 Domino's 2.1 7.2 3.6
Slide 5: SWS growth of 12.1% despite macro headwinds
SWS growth of 12.1% despite macro headwinds SWS Growth and Breakdown (as percentages and vs. last year) RB % QTD New Stores Forex Impact +12.1 +12.0 +12.1 Growth drivers PH: JB, MI,CK 4.7 7.4 IO: Double-digit SWS growth 9.1 for JB, and CBTL, tempered by China (-12.7%) 4.8 3.6 2.9 2.5 1.0 PHL INTL Gl
Slide 6: Q2'24 SWS (Php 95.8Bn), +12.1% vs. LY
Q2’24 SWS (Php 95.8Bn), +12.1% vs. LY Systemwide Sales in PHP billions Global All-time highest when reported Highest vs similar quarters when reported Philippines International 94 96 86 87 87 85 78 79 73 73 62 59 59 57 60 36 37 54 55 54 53 32 51 51 33 34 34 50 24 48 31 46 28 15 16 33 16 41 14 15 16
Slide 7: Q2 SWS, SSS (RB) and Network by Regions & Business Units
Q2 SWS, SSS (RB) and Network by Regions & Business Units 2023 %Δ Q2 2024 RB Sales New Stores Impact of SWS Growth Growth Contribution FOREX on SWS Philippines 12.1 9.1 2.9 China (12.7) (13.4) 0.2 0.6 North America (NA) 8.5 5.1 (0.5) 3.9 NAAB 15.2 10.6 0.7 3.9 Smashburger (1.9) (3.6) (2.3) 3.9 Europe
Slide 8: Summary of YTD Key Metrics
Summary of YTD Key Metrics Note: Percentages are versus SPLY unless stated otherwise SWS Revenues SSSG Gross Profit H1 ‘24 H1 ‘24 H1 ‘24 H1 ‘24 Php24.3Bn Php182.6Bn Php128.5Bn +6.3% +16.2% +11.3% +10.9% TC +5.2% AC 1.0% + 18.9% Margin Net Operating Income NIAT H1 ‘24 H1 ‘24 Php9.2Bn Php5.7Bn +20.6%
Slide 9: H1'24: Ahead of industry operating leverage
H1’24: Ahead of industry operating leverage (In Php Billions, except EPS) in Php Bn H1 %G as % of Mgn vs except EPS 2024 vs LY Rev LY (bps) EBITDA 18.8 18.2 14.6% +90 Net Income 5.9 25.5 4.6% +50 NIAT 5.7 28.9 4.4% +70 EPS - Basic 4.866 30.4 EPS - Diluted 4.858 30.3 9
Slide 10: Double-digit SWS growth in most markets
Double-digit SWS growth in most markets RB % YTD New Stores Forex Impact +11.1 +11.5 +11.3 Growth drivers 3.5 PH: JB, MI, and CK drove PH sales with growth of 12.3%, 6.3 13.8%, and 10.6%, 8.1 respectively 6.8 IO: JB NA, JB EMEA, CK EMEA, CBTL showed strong 4.5 growth 3.0 1.3 - 0.5 PHL INTL Global Av
Slide 11: H1 SWS, SSS (RB) and Network by Regions & Business Units
H1 SWS, SSS (RB) and Network by Regions & Business Units 2023 %Δ YTD June 2024 RB Sales New Stores Impact of SWS Growth Growth Contribution FOREX on SWS Philippines 11.1 8.1 3.0 - China (8.0) (8.7) 1.9 (1.2) North America (NA) 9.4 3.3 3.1 3.0 NAAB 17.6 8.1 6.6 3.0 Smashburger (3.0) (4.2) (1.8) 3.0 E
Slide 12: EBITDA by Region & Business Unit
EBITDA by Region & Business Unit in Php Mn Q2'24 G% H1'24 G% Philippines 6,436 9.3% 12,506 14.0% People's Republic of China 233 39.8% 507 23.3% North America 875 62.0% 1,655 61.5% Asian Brands 841 70.3% 1,476 88.3% Smashburger 34 -26.1% 179 -25.7% Europe, Middle East, Asia (EMEA) 390 57.1% 790 67.0%
Slide 13: Smashburger ADS shows significant improvement
Smashburger ADS shows significant improvement Average Daily Sales (ADS) at stable trend, tracking towards short-term target of USD 4K ADS* 2024 ADS 5yr ADS CAGR (‘19 to ‘24) +9.1% +10.2% +10.2% +9.9% +9.5% +10.1% 3,696 3,647 3,627 3,551 3,496 3,378 Jan Feb Mar Apr May Jun USD 4k ADS = Store NOI posi
Slide 14: Smashburger EBITDA-positive since Q1'23
Smashburger EBITDA-positive since Q1’23 On track to next milestone to be NOI-positive at USD 4k ADS in millions PHP Q2'24 % of Rev G% Revenues 2,225 -8.5% Gross Profit 136 6.1% -17.1% EBITDA 34 1.5% -26.1% H1'24 % of Rev G% Revenues 4,417 -9.5% Gross Profit 294 6.6% -17.7% EBITDA 179 4.1% -25.7% Not
Slide 15: CBTL Topline driven by organic and new stores
CBTL Topline driven by organic and new stores 2023 %Δ Q2 2024 RB Sales New Stores Impact of SWS Growth Growth Contribution FOREX on SWS Philippines 12.1 9.1 2.9 China (12.7) (13.4) 0.2 0.6 North America (NA) 8.5 5.1 (0.5) 3.9 NAAB 15.2 10.6 0.7 3.9 Smashburger (1.9) (3.6) (2.3) 3.9 Europe, Middle Ea
Slide 16: Coffee Bean & Tea Leaf – Rolling Base Growth
Coffee Bean & Tea Leaf – Rolling Base Growth vs. Q2 2023 vs. YTD June 2023 RB G% TC G% AC G% RB G% TC G% AC G% Singapore (1.4%) 2.1% (3.4%) (3.7%) (1.2%) (2.5%) Malaysia 5.2% 11.6% (5.7%) (3.1%) (0.5%) (2.6%) Americas 13.2% 1.9% 11.2% 8.8% 0.9% 7.8% South Korea (3.5%) 0.0% (3.5%) (4.2%) 0.0% (4.2%)
Slide 17: Coffee Bean & Tea Leaf – Store Count, +10.3% to SWS
Coffee Bean & Tea Leaf – Store Count, +10.3% to SWS 33 out of 39 Store Openings are franchised stores primarily in Kuwait and Philippines 17
Slide 18: Coffee Bean & Tea Leaf named Top Brand in Kuwait
Coffee Bean & Tea Leaf named Top 10 Brand in Kuwait for Customer Satisfaction CBTL’s Kuwaiti international franchise partner, Abdulghani Al Ghunaim, Chairman of Al-Ghunaim Trading Co. Ltd., receives the recognition from Service Hero as the Top Café in Kuwait for Customer Satisfaction 18
Slide 19: Traffic-driven growth for CBTL
Traffic-driven growth for CBTL Average daily traffic up by +8.7% and +5.2% for Q2’24 and H1’24, respectively Q2'24 % of Rev G% Revenues 5,293 21.1% Gross Profit 1,138 21.5% 48.8% EBITDA 896 16.9% 100.0% H1'24 % of Rev G% Revenues 9,884 14.3% Gross Profit 1,968 19.9% 24.7% EBITDA 1,382 14.0% 29.7% 19
Slide 20: Jollibee Chickenjoy named best quick-service fried chicken
Jollibee Chickenjoy named best quick-service restaurant fried chicken by USA Today’s 10Best 20
Slide 21: Effectiveness Measures: Margin Rates
Effectiveness Measures: Margin Rates
Slide 22: Margin growth seen on YoY, QoQ basis
Margin growth seen on YoY, QoQ basis Percentages to Revenues Q2 2023 Q1 2024 Q2 2024 19.5% 18.0% 18.3% 7.5% 6.6% 6.7% 4.3% 4.5% 3.8% Gross Profit Margin Operating Profit Margin NIAT Margin Better inventory costs in both PH and Intl businesses helped lift GPM 22
Slide 23: Free Cashflow
Free Cashflow S838 @7 2 . MR nnO@ m2 @ ES =. &.
Slide 24: Free Cash Flow
Free Cash Flow in Php Mn 1H 2024 Q2 2024 Q1 2024* Revenues 128,520 67,216 61,304 EBITDA 18,772 9,823 8,949 EBITDA Margin 14.6% 14.6% 14.6% Adjustments: Marked-to-market gain (loss) on FVTPL 159 82 77 Foreign Exchange gain - net -105 -91 -13 Underlying EBITDA 18,718 9,833 8,885 Underlying EBITDA Marg
Slide 25: Strategic Alignment 5YP Direction
Strategic Alignment 5YP Direction
Slide 26: JFC Strategic Choices
JFC Strategic Choices Triple NIAT and grow ROIC to 20% Scale the business with five must wins thru franchising Turnaround Build coffee and tea Expand Secure long-term Smashburger to a Grow and dominate segment through Jollibee International viability and succeed profitable growth Philippines capital
Slide 27: Preferred Shares Issuance Rationalized
Preferred Shares Issuance Rationalized • Following careful consideration of all relevant factors and in the interest of achieving the best value for our shareholders, we have made the decision to withdraw our previously announced public offering of Series C Preferred Shares. We will explore other ca
Slide 28: Repayment Plan of Php3.0B Preferred Shares
Repayment Plan of Php3.0B Preferred Shares Amounts in Php billions Php3.0B Preferred Shares due on Oct 20, 2024 Cash from operations in H1 2024 Cash from operations in H2 2024 Preferred To be initially funded Outstanding Shares through short-term debt in Preferred issued in Oct, target to be repaid
Slide 29: Sufficient and improving debt headroom
Sufficient and improving debt headroom Debt to EBITDA 3 1.7 1.4 • Improved financial leverage is Q2 2023 Q2 2024 Financial Covenant highly driven by (Maximum) the group’s improved 12- Total Liabilities to month rolling Equity 3 EBITDA by 14%. 1.8 1.7 • Despite Q2 2023 Q2 2024 Financial Covenant depr
Slide 30: FY24 Guidance
FY24 Guidance S838 @7 2 . MR nnO@ m2 @ ES =. &.
Slide 31: Upgraded FY2024 Guidance
Upgraded FY2024 Guidance …due to robust H1’24 and Compose Coffee acquisition Q2 and H1 Results Previous Guidance Upgraded Guidance Global SWS Growth Q2’24 +12.1%; H1’24 +11.3% 10% to 14% 10% to 14% (Same) RB Growth Q2’24 +7.4%; H1’24 +6.3% 5% to 7% 5% to 7% (Same) Store Openings Organic: 700 to 750;
Slide 32: Capex Reduction %s per Brand/Market
Capex Reduction %s per Brand/Market - Investment in Jollibee Global expansion will be prioritized. Non-core single market brands will shift to franchise model - Cautious and long-term stance on China, hence, focus on improving performance of existing stores and new store developments shifting to fra
Slide 33: Jollibee Foods Corporation
Jollibee Foods Corporation Q2 H1 2024 Earnings Call August 15th 2024