JFC Reports Quarter 4 and Full Year 2022 Financial Results Sales for the Year Up 40.2%, Operating Income by 58.4%
Metro Manila, Philippines, March 16, 2023 – Jollibee Foods Corporation (PSE: JFC) – Financial Results for the Fourth Quarter and Year Ended December 31, 2022
Jollibee Foods Corporation (JFC), one of the largest Asian food service companies, today reported its financial results of operations for the fourth quarter and full year ended December 31, 2022, based on its Audited Consolidated Financial Statements.
Commenting on the JFC Group’s performance for 2022, JFC CEO, Ernesto Tanmantiong stated:
“The JFC Group delivered another year of strong growth in challenging macroeconomic conditions. System wide sales (SWS) and revenue for the entire year grew by 40.2% and 38.0%, respectively, both at the high end of our 35% to 40% guidance range for the year.
Our 2022 sales growth was driven by 27.0% same store sales growth (SSS), 6.1% from new stores, the impact of the Milksha acquisition, and 5.2% contributed by foreign currency translation gain. Dine-in sales improved significantly driven by increased mobility due to easing of restrictions in markets where we operate. Off-premise channels, particularly delivery showed continued resilience and we expect sustained robust growth as we improve further our digital touchpoints.
In 2022, the JFC Group continued its global expansion momentum. We opened 542 stores and grew store network by +9.2% versus prior year, exceeding our guidance for 2022. This is the highest number of stores opened in a single year in JFC’s history.
Against a backdrop of high inflation and Covid-related disruptions in China, the JFC Group generated an operating profit of Php9.9 billion, 58.4% higher compared to 2021 and 6.5% better than our 2018 pre-pandemic operating income level of Php9.3 billion, our guidance for 2022.
Looking ahead, while we expect macroeconomic challenges to persist in 2023, we are confident that the JFC Group is resilient and well-positioned to drive near-term growth. We have clear priorities on profitability while we continue to invest strategically to deliver long-term growth and value for our shareholders.”
Fourth Quarter and Full Year 2022 Financial Highlights
Consolidated revenues grew by 36.8% for the quarter and 38.0% for the entire year. System wide sales, a measure of all sales to consumers, both from company owned and franchised stores grew by 38.5% in the 4th quarter of 2022 compared to the same period in 2021 and by 40.2% for the entire year of 2022.
Full year SWS in the Philippines grew by 44.6% and International SWS grew by 34.0% led by SuperFoods (+100.2%), EMEAA (+42.0%), The Coffee Bean and Tea Leaf (CBTL +33.0%) and North America (+29.9%). China’s performance was flat due to strict Covid-related health measures and lockdowns.
Full year SSS in the Philippines grew by 40.6% driven by volume or transaction count
(+28.0%). International SSS% grew by 7.7%, led by SuperFoods (+41.3%), CBTL (+15.1%), EMEAA (+10.2%), and North America (+7.1%). China’s SSS declined by 12.6%. Excluding China, same store sale of the foreign business grew by 12.1% while the global business grew by 30.2%.
At the end of 2022, the JFC Group operated 6,480 stores worldwide: Philippines (3,285) and International (3,195).
The JFC Group posted 4th quarter Operating Income of Php1.9 billion, a decrease of 23.7% versus prior year mainly due to provisions to curtail non-priority brands (Php0.6 billion) and increased A&P spend (as
% of SWS 3.4% versus 2.9% prior year). Excluding one-off items and A&P spend timing difference, the JFC Group’s operating income is Php3.6 billion, 44.0% higher than the operating income for Q4 2021 of Php2.5 billion. Gross Profit (+37.6% versus prior year) protection through pricing and cost efficiencies yielded a +10bps margin rate improvement versus prior year 4th quarter to 18.3%, amidst consistent inflationary pressures which peaked at 21.5% in the 4th quarter versus 2.8% in prior year.
Other Income for the 4th quarter includes general provisions (Php0.3 billion) and lower write-off of liabilities resulting from continuous reviews and process improvements (Php0.5 billion), offset by gain from financial assets at FVTPL (Php0.3 billion.)
Full year consolidated Operating Income grew by 58.4% to Php9.9 billion, with Operating Margins improving from 4.1% of revenues in 2021 to 4.7% in 2022.
JFC Chief Financial Officer, Mr. Richard Shin gave the following statement:
“The JFC Group demonstrated strong operating leverage in 2022 with store and manufacturing costs and operating expenses declining by 2.6% and 0.2% of revenues, respectively. Despite industry-wide headwinds, margins for the 4th quarter remained resilient due to pricing actions and cost management initiatives. The JFC Group also stepped-up investments in brand building as well as organization capabilities, particularly for our international business which will help drive profitable growth over time.”
Consolidated earnings before interest, taxes, depreciation, and amortization (EBITDA) for the year reached Php31.2 billion, up by 32.2% from Php23.6 billion in the same period last year. Before income tax, the JFC Group generated Php11.2 billion or 82.1% year-on-year growth. Provision for income tax significantly increased in 2022 versus 2021 primarily driven by a deferred tax benefit of Php1.4 billion in 2021 compared to an expense of Php334.4 million in the current year. Net income attributable to equity holders of the Parent Company amounted to Php7.6 billion, an increase of 26.4% compared to Php6.0 billion in 2021. Earnings per share (Basic) grew by 20.7% to Php6.400.
Outlook for 2023
Based on its target for the year, the JFC Group projects full year systemwide sales to be up by 15.0% to 20.0%, with same store sales growth of 7% to 10.0% and store network increase of not less than 5.0%. Operating income growth will be in the range of 20.0% to 25.0%.
The JFC Group plans to open 550 to 600 owned and franchised stores (gross) in 2023 and expects capital expenditures to be in the range of Php17.0 to 19.0 billion.
Awards and Recognitions
For the third straight year, the JFC Group is named among the World’s Best Employers by Forbes in 2022. The JFC Group is the highest-ranking restaurant company as well as the highest-ranking Philippine-based company.
The JFC Group was also recognized by the ASEAN Corporate Governance Scorecard Golden Arrow Awards, which measures a company’s performance in such areas as facilitating the rights and equitable treatment of shareholders, ensuring transparency through timely disclosure of material information, and monitoring how the board guides the company strategically and its accountability to its stakeholders.
Corporate Actions
The JFC Board of Directors, in its meeting held on March 14, 2022, approved the following:
– The declaration of a regular cash dividend of Php8.20525 per share for Series A preferred shares, for a total payout of Php24.6 million. The regular cash dividend will be given to JFC stockholders of record as of March 29, 2023 (ex-dividend date of March 24, 2023). Payment date is on April 14, 2023.
– The declaration of a regular cash dividend of Php10.60125 per share for Series B preferred shares, for a total payout of Php95.4 million. The regular cash dividend will be given to JFC stockholders of record as of March 29, 2023 (ex-dividend date of March 24, 2022). Payment date is on April 14, 2023.
Forward-Looking Statements Disclaimer
The foregoing disclosure contain 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 in the relevant forward-looking statement and the JFC Group gives no assurance that such forward-looking statements will prove to be correct or that such intentions will not change. This Press Release discloses important factors that could cause actual results to differ materially from the JFC Group’s expectations. All subsequent written and oral forward- looking statements attributable to the JFC Group or persons acting on behalf of the JFC Group are expressly qualified in their entirety by the above cautionary statements.