Jollibee Foods Corp. · PSE:JFC
Jollibee Foods — Q3 2024 Earnings Presentation
39 slides from Jollibee Foods's earnings presentation, Nov 13, 2024
Slide 1: Jollibee Foods Corporation Q3 9M 2024 Earnings Call
Jollibee Foods Corporation Q3 9M 2024 Earnings Call November 13th 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: Financial Highlights
Financial Highlights
Slide 4: CFO Updates
CFO Updates Q3’24 delivered another strong quarter, key results and growth rates vs. LY as follows: i. Systemwide Sales: Q3’24 Php 98.5Bn +13.2%; 9M’24 Php 281.1Bn +12.0% ii. Rolling Base: Q3’24 5.7%; 9M’24 5.8% iii.Revenues: Q3’24 Php67.7Bn +10.1%; 9M’24 Php196.2Bn +10.6% iv.Gross Profit: Q3’24 +15
Slide 5: Q3 SWS/SSSG and Network Growth versus Industry Peers
Q3 SWS/ SSSG and Network Growth versus Industry Peers SWS Store SSSG Growth Growth JFC 5.7 13.2 42.8 Yum China -3.0 4.0 12.5 McDonald's -1.5 0.0 3.9 Starbucks -7.0 -3.0 5.7 Chipotle 6.0 13.0 8.9 Domino's 3.0 5.1 4.0 Luckin Coffee -13.1 -29.3 36.5 5
Slide 6: Key Metrics Snapshot
Key Metrics Snapshot (amounts in Php Bn unless stated otherwise, margin changes expressed in %pt change) Key P&L Metrics Q3'24 Q3'23 G%vsLY Q3'22 G%vs'22 9M'24 9M'23 G%vsLY 9M'22 G%vs'22 Revenue 67.7 61.5 10.1% 55.4 22.1% 196.2 177.4 10.6% 150.4 30.5% Gross Profit 13.0 11.3 15.2% 9.5 36.9% 37.3 32.2
Slide 7: FY24 Guidance
FY24 Guidance 2B 3 @ @ RAKE PT sn [tstoma] iss ratio EP siimee &) ©@ s
Slide 8: FY2024 Guidance
FY2024 Guidance Largely in line with guidance Guidance Q3 Results 9M Results Global SWS Growth 10% to 14% 13.2% 12.0% SSSG 5% to 7% 5.7% 5.8% Store Openings 750 to 820 new stores 409 Gross opens Store Network Growth 42% to 45% 42.8% Capital Expenditures (Absolute) Php16Bn to 18Bn Php7.8Bn Operating
Slide 9: Q3 & 9M 2024 Growth Details
Q3 & 9M 2024 Growth Details
Slide 10: Q3 SWS, SSSG and Network by Regions & Business Units
Q3 SWS, SSSG and Network by Regions & Business Units 2023 %Δ Newly Q3 2024 New Stores Acquired Impact of SWS Growth SSSG Contribution Business FOREX on SWS Contribution Philippines 8.5 6.4 2.1 China (7.4) (12.1) 1.3 3.4 North America (NA) 4.8 8.1 (5.4) 2.2 NAAB 11.3 15.4 (6.2) 2.2 Smashburger (6.7)
Slide 11: 9M SWS, SSSG and Network by Regions & Business Units
9M SWS, SSSG and Network by Regions & Business Units 2023 %Δ Newly YTD Sep 2024 New Stores Acquired Impact of SWS Growth SSSG Contribution Business FOREX on SWS Contribution Philippines 10.2 7.5 2.7 - China (7.8) (9.9) 1.8 0.3 North America (NA) 7.8 2.8 2.2 2.7 NAAB 15.3 7.1 5.6 2.7 Smashburger (4.2
Slide 12: NOI Bridge: Q3 2024 vs. LY
NOI Bridge: Q3 2024 vs. LY Growth investments driven by people, technology, and brand-building A&P as % of Revenues: Q3’24: 3.5% Q3’23: 2.9% 14
Slide 13: NOI Bridge: Q3 2023 vs. Q3 2022
NOI Bridge: Q3 2023 vs. Q3 2022 High base from 2023 on healthy revenue growth, strong 1.2%pt GPM expansion and lower A&P spend Margin-based growth on efficient Growth Tamer ad costs investments spending vs. management SPLY Organic business growth Q3’22 Q3’23 NOI NOI 15
Slide 14: EBITDA by Region & Business Unit
EBITDA by Region & Business Unit in Php Mn Q3'24 G% 9M'24 G% Philippines 5,646 13.9% 18,152 14.0% People's Republic of China (7) -101.2% 500 -50.4% North America 760 7.3% 2,415 39.4% Asian Brands 976 48.0% 2,452 69.9% Smashburger (216) -544.6% (37) -112.7% Europe, Middle East, Asia (EMEA) 396 33.6%
Slide 15: Trends arising from China amid challenging macros
Trends arising from China amid challenging macros in Php Mn Q2'24 G% 1. Asset-light distribution Philippines 6,436 9.3% People's Republic of China 233 39.8% North America 875 62.0% 2. Nationalism Asian Brands 841 70.3% Smashburger 34 -26.1% 3. Product innovation Europe, Middle East, Asia (EMEA) 390
Slide 16: Impact of the Fast Casual industry in the US vs. Smashburger
Impact of the Fast Casual industry in the US vs. Smashbuger • QSR Media: Fast Casual CAGR is expected to be 15.2% (2024-2028) • Growth drivers: i. Younger age group (Millenials and Gen-Z) strongly prefer experiences that combine quality with ease ii. Tasty, freshly-made meals that are also health-co
Slide 17: Fast Casual US… however
Fast Casual US… however • Value wars amid challenges in keeping traffic growth stable • Growth in traffic & frequency of visit depend on the success of ad campaigns, promos, and LTOs • Flat TC seen as a win; early Oct suggests traffic remains flat (ref: SHAK Q3 call) Smashburger post-new menu launch
Slide 18: Smashburger Accomplishments as of 9M'24
Smashburger Accomplishments as of 9M’24 1. “Lean in” Brand Positioning 2. Menu Relaunch - brought back all-American Burger at competitive price to boost lunch daypart - Post Launch resulted to high of USD 4k ADS especially for franchisees (with indication of repeat consumption) 3. In-house digital a
Slide 19: Smashburger looking to build momentum from menu relaunch
Smashburger looking to build momentum from menu relaunch Sales levers remain in place to help hit ADS targets in Php Mn Smashburger made a deliberate pivot away from “funnel” Q3'24 Q3'23 % of Rev G% marketing since the roll-out of the Revenues 1,972 2,278 -13.4% new menu. EBITDA (216) 49 -11.0% -544
Slide 20: Total system trends
Total system trends Post-Launch SYS ADS by Week 3,734 3,512 3,440 3,237 3.0% 1.0% (2.7%) (6.4%) Full Week 1 Full Week 3 Full Week 5 Full Week 7 RB ADS RB G% Any changes to prior week data are attributable to missing data that has now been incorporated. Please note that we are missing franchise sales
Slide 21: Smashburger sets clear Average Daily Sales (ADS) targets
Smashburger sets clear Average Daily Sales (ADS) targets ADS at stable trend, tracking closely to short-term target of USD 4K ADS In USD absolutes ~3,500 4,000 4,500 6,000 +9.5% 5yr CAGR Store NOI Company Mid-term 9M ‘24 ADS Positive NOI Positive ADS Target 23
Slide 22: Domestic PH vs. International Profit Comparison
Domestic PH vs. International Profit Comparison
Slide 23: Q3'24 NIAT growth slightly faster than SPLY
Q3’24 NIAT growth slightly faster than SPLY (In Php Billions) 2023 2024 Key Financial Highlights 2024 vs 2023 for quarter ended September 30 Operating Income NIAT 2.8 +15.3% +11.6% 4.8 +3.6% 2.4 2.3 2.3 4.3 +8.5% 3.8 3.5 +25.4% 1.0 0.5 0.8 +167.6% 0.2 Philippines International Global Philippines Int
Slide 24: YTD OI within guidance; Intl business delivers positive NIAT
YTD OI within guidance; Intl business delivers positive NIAT (In Php Billions) 2023 2024 Key Financial Highlights 2024 vs 2023 for period ended September 30 Operating Income NIAT 14.0 8.3 8.5 +17.3% +12.0% +24.1% 7.4 +11.7% 11.7 11.9 6.8 10.5 +58.1% 2.3 1.4 0.2 Philippines International Global Phili
Slide 25: Key Business Updates
Key Business Updates
Slide 26: Jollibee Brand's performance per region
Jollibee Brand’s performance per region Strong SWS growth, SSSG despite fewer new store openings All in %, except Store Count Store Q3 '24 SWS G% SSSG Store G% Count Philippines 10.3 7.2 1,259 3.5 Hong Kong & Macau 12.7 10.1 24 - N. America 14.4 19.6 102 9.7 Vietnam 30.7 14.0 197 15.2 EMEA 25.0 9.7
Slide 27: Jollibee #1 Food Brand in SEA by Campaign Asia
Jollibee #1 Food Brand in SEA by Campaign Asia 29
Slide 28: Employer of the Year awarded by People Management Association of the Philippines
Employer of the Year awarded by People Management Association of the Philippines 30
Slide 29: Coffee Bean and Tea Leaf
Coffee Bean and Tea Leaf 2380 fF @ 1 MR ima S gm "6 SE
Slide 30: CBTL mainly driven by traffic-led organic growth
CBTL mainly driven by traffic-led organic growth US, Malaysia, SEA and ME franchisees remain drivers of topline growth 2023 %Δ Newly Q3 2024 New Stores Acquired Impact of SWS Growth SSSG Contribution Business FOREX on SWS Contribution Coffee Bean & Tea Leaf (CBTL) 17.8 10.7 4.9 2.2 Highlands Coffee
Slide 31: CBTL sustains traffic growth, driving EBITDA improvement
CBTL sustains traffic growth, driving EBITDA improvement Average daily traffic up by +7.2% and +5.9% for Q3’24 and 9M’24, respectively Q3'24 Q3'23 % of Rev G% Revenues 5,250 4,443 18.2% EBITDA 815 508 15.5% 60.5% 9M'24 9M'23 % of Rev G% Revenues 15,134 13,091 15.6% EBITDA 2,196 1,573 14.5% 39.7% 33
Slide 32: Operational Efficiencies
Operational Efficiencies BQ@O4 *@ LMR tn O@ mo OS = & Jollibee Chowking
Slide 33: Growth seen across all margin measures
Growth seen across all margin measures Percentages to Revenues Q3 2023 Q3 2024 19.1% 18.3% 7.0% 7.1% 4.0% 4.1% Gross Profit Margin Operating Profit Margin NIAT Margin 35
Slide 34: Free Cashflow
Free Cashflow on ee) BR rite QS ee SS SW
Slide 35: Free Cash Flow
Free Cash Flow Excl Compose in '000 Q3 2024 Coffee Revenues 67,727,995 66,854,509 EBITDA 9,618,320 9,135,485 EBITDA Margin 14.2% 13.7% Adjustments: Marked-to-market gain (loss) on FVTPL (23,154) (23,154) Foreign exchange gain - net (639,252) (639,252) Underlying EBIDA 10,280,726 9,797,891 Underlying
Slide 36: Financial Leverage Position
Financial Leverage Position Debt to EBITDA 3 1.6 1.5 Q3 2023 Q3 2024 Financial Covenant (Maximum) Total Liabilities to Equity 3 1.8 1.7 Q3 2023 Q3 2024 Financial Covenant (Maximum) Debt Service Coverage Ratio 5.9 2.2 1.3 Q3 2023 Q3 2024 Financial Covenant (Minimum) 38
Slide 37: Key Summary
Key Summary ✓ Growth ahead of industry ✓ Continued strong Jollibee brand and expansion ✓ Continued sustainable growth in the Philippines, ahead of competition ✓ Compose Coffee’s first quarter post-acquisition results ahead of targets ✓ Managing through 2 key challenges • China value repositioning •
Slide 38: 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 39: Jollibee Foods Corporation
Jollibee Foods Corporation Q3 9M 2024 Earnings Call November 13th 2024