To focus on growing business in the PH, US and China
Jollibee Foods Corp. (JFC), the listed operator of the fast food chain Jollibee, is looking at growing its sales and net income in double-digits to make the company one of the Top 5 quick service restaurants in the world.
“Beyond 2015, we look forward to continue double-digit sales and profit sustaining or even improving our trajectory in the next five years,” JFC Chief Executive Officer Ernesto Tanmantiong said during the firm’s annual stockholders’ meeting on Friday.
In the same meeting, JFC Chairman Tony Tan Caktiong said the company aims to become “one of the Top 5 quick service restaurants in the world” in terms of market capitalization.
JFC is currently 10th in terms of market capitalization, according to a recent data from Bloomberg.
Chief Financial Officer Ysmael Baysa said in a separate press briefing that the plan to be in the Top 5 may be realized in seven years on continued organic growth of new and existing stores and the acquisition of new businesses abroad.
The company’s top officials emphasized the tack of growing JFC in its “three main pillars” – the Philippines, China and the United States – in the next five years.
In terms of acquisitions, Tan Caktiong said the company is scouting for a new fast food chain brand in the US in the next 12 months, preferably with a strong foothold in the US market.
“We’re looking at a position in US. We can do something in the next 12 months. Brands in US are doing well, but they have high valuations… But we hope we would get the right brand and get the right valuation,” Tan Caktiong said.
He added that the company is talking to a US brand that has recently conducted an initial public offering and is doing well in the states. He did not name the US company.
Also in the works are plans to expand into “Canada, Malaysia and other US states like Chicago and Florida” towards 2017, Tan Caktiong noted, saying the strategy is to build one Jollibee store in each new market.
But focusing on the Philippines and China and the US is the company’s priority.
“In terms of stages of growth, it is good timing for Jollibee to go to these countries. China has a great population, a large consumer market. In the US, in terms of consumer market, it is one of the biggest,” Tan Caktiong said.
“For competition, as long as we do the basics, we’re back to our belief that the food should be tasty and the price should be right,” he added.
From Jollibee’s international operations, China contributes the biggest revenue share of more than 12 percent a year. The US operations accounts for 5 percent of topline contributions, with Vietnam at 3 percent. The company also operates in the Middle East.
The company has allotted P9.1 billion for capital expenditures this year or 68.5 percent more than the P5.4 billion it spent in 2014.
The company said P6.7 billion of the 20156 capex will fund the expansion and operations in the Philippines, P1.7 billion for China, and P700 million will go to the US, Southeast Asia, and the Middle East.
In the first quarter of the year, the firm saw its net income climb 12.6 percent to P1.23 billion from P1.09 billion a year ago on system wide sales – a measure of all sales to consumers – of P29.9 billion, up 9.5 percent to P27.3 billion. Revenues rose by 10 percent to P23 billion from P20.9 billion.
In January to March, JFC opened 60 stores – 49 in the Philippines, 11 overseas. As of end-March, the company was operating 2,335 outlets in the Philippines and 616 overseas.