10

MAKING A BEELINE TO SUCCESS

We initiate coverage on Jollibee Foods Corporation (JFC) with a BUY rating
9
based on a one-year target price of PHP131.72 using the Discounted Free
8 Cash Flow to the Firm method. This represents an upside of 14.44% from its
closing price of PHP 115.10 on June 1, 2020. JFC’s growth is supported by its
7
high income base and expected recovery during the COVID-19 pandemic.
6 This is further backed by JFC’s future plans on adapting to customers’ new
5
behavior and on further expanding its horizons beyond national territories.
With a reputation that is difficult to water down, JFC has a bright prospect
4 ahead of it.
3 RECUPERATION AMIDST PANDEMIC
2 JFC’s revenues, as for most other businesses around the globe, has been
pummeled by the COVID-19 pandemic. With a 2.3% drop in its 2020 first
1
quarter revenues (Figure 3), management believes this
0 effect will drag on for the rest of the year. However, despite the expected fall
2017 2018 2019 2020F 2021F 2022F 2023F 2024F in revenues, we still expect a high Php 165.4B revenue by the end of the year.
Subsequently, we anticipate JFC’s performance to bounce back starting 2021
Figure 1. JFC’s Earnings per Share after it has commenced its restructuring plans in 2020, with a CAGR of 11.5%
(Figure 4).
CONCRETE RESTRUCTURING PLANS
40.00% With the pandemic altering consumers’ behavior, JFC has set its eyes on a
massive restructuring with the assumption that they would not immediately
30.00% return to pre-pandemic behavior as lockdowns slowly being eased. However,
20.00% its capital expenditures for 2020 has been reduced to Php5.2B from Php14.2B
10.00%
as a result of the pandemic. Part of this revamp is for boosting its delivery
services network and shutting down non-performing stores. JFC will also
0.00% invest in digital commerce and technology by developing new mobile apps for
-10.00% 2015 2016 2017 2018 2019 2020 orders to bolster its decision to strengthen its delivery services. Furthermore,
“cloud kitchen” units would also be built, which are facilities without dine-in
-20.00% services, to cut down space and lower rent costs. On top of that, support and
-30.00% management groups would be transformed in the field and in the offices.
-40.00% DEEPER GLOBAL MARKET PENETRATION
-50.00% With JFC’s continuous aggressive push abroad, they were able to penetrate
the international market through branding and acquisition of international
brands. In 2019, JFC was able to open 497 stores, 224 of which are new stores
JFC PSEi abroad. In 2020, JFC disclosed that they originally planned out to open 600
new stores, 350 of which were for their international market; however, due to
the unprecedented disruption brought by the pandemic, JFC is now set to
open 171 stores globally instead, costing JFC further delayance in its global
Figure 2. JFC VS PSEI Index Movement market penetration plans. Even so, JFC might be able to change this if they
 were to continue acquiring known brands inside a particular country, just exactly
40,600 what they did with The Coffee Bean & Tea Leaf (CBTL) and Smashburger,
expanding its portfolio as well.
40,400
BUSINESS OVERVIEW
Revenues (in Thousands)

40,200
JOLLIBEE FOODS CORPORATION, doing business under the name and style
40,000
of Jollibee, was incorporated in the Philippines and registered with the
39,800 Philippine Securities and Exchange Commission (SEC) on January 11, 1978.
The Parent Company and its subsidiaries (collectively referred to as “the JFC
39,600 Group”) and affiliates are involved primarily in the development, operation and
39,400 franchising of quick service restaurants (QSRs). The other activities of the JFC
Group include manufacturing and property leasing in support of the QSR
39,200 systems and other business activities.
39,000 BUSINESS SEGMENTS
38,800 Food Service. The food service segment is involved in the operations of
2019 Q1 2020 Q1 QSRs and the manufacture of food products to be sold to JFC Group-owned
and franchised QSR outlets. 93% of the company’s total revenue is derived
Figure 3. First Quarter Revenues from this segment. Currently, JFC operates the largest food service operator
in the Philippines and dominates limited-service restaurants in establishment
types. As of December 31, 2019, JFC has a total of 5,599 stores, owned and
franchised. The operated stores in the Philippines include Jollibee, Chowking,
300,000
GR Greenwich, PHO24, Red Ribbon, Mang Inasal, etc. It also operates stores in
% CA
Revenues (in Thousands)

250,000 11.5 other countries like China, Vietnam, Brunei, Hong Kong, Singapore, etc. The
stores abroad include Younghe King, Hong Zhuang Yuan, Dunkin’ Donuts,
200,000 Smashburger, etc.
Franchising. The franchising segment, which contributes 7% of the company’s
150,000
total revenue, is involved in the franchising of the JFC Group’s QSR store
100,000 concepts. Revenue from this segment includes commissary sales and other
fees from the franchised stores.
50,000 Leasing. The leasing segment leases store sites mainly to the JFC Group’s
0 independent franchisees. These leases have terms of between three (3) and
2020F 2021F 2022F 2023F 2024F
twenty (20) years, and generally include a clause to enable upward revision of
the rent charges on an annual basis based on prevailing market conditions.
Furthermore, the JFC Group also subleases certain parcels of land with lease
Figure 4. 5-year Revenue Forecast terms between five (5) to twenty (20) years. These lease contracts contain
renewal options under terms and conditions that are mutually agreed upon by
the parties.
Food service BUSINESS STRATEGIES
7% 0% Franchising
Global expansion and acquisition. During recent years, the company has
Leasing been aggressively expanding its global footprint overseas by opening Jollibee
stores abroad and acquiring foreign brands, including the recent acquisition of
lost-making US-based Coffee Bean & Tea Leaf in Indonesia. Other foreign
brands include the popular US fast-casual burger chain Smashburger that
serves fresh 100% certified Angus beef burgers with 345 stores in 2018. Despite
the increased focus on overseas markets, JFC’s momentum in its home market
continued.
Non-stop innovation. The JFC Group plans to continue to increase market
share through, among others, store network expansion supported by new
product launches, tie-ups and increasing visit frequency and targeting certain
consumer groups that are not yet part of the customer base through, among
93% others, promotions and target advertising.
Marketing Skills. The marketing strategy of Jollibee Foods Corporation stands
out from the clutter and competition. As Jollibee knows their target audience
Figure 5. 2019 Business Segment Revenue which is the traditional family, all communication materials are focused on the
Breakdown importance of family values in which this makes JFC a growing international
QSR player. In this way, JFC focuses on reaching consumers effectively and
 developing an integrated marketing approach that makes use of new and
innovative tactics to reach its target consumers. It also exerts effort on ground
activities which are less expensive than commercial marketing tactics. Still,
digital marketing is still used efficiently and expertly to reach a wider audience
at a lower cost.

Serving the employees. The Company, its local subsidiaries and support units
have approximately 16,690 employees in the Philippines as at December 31,
2019. The regular daily-paid employees of Company- owned Jollibee stores are
subject to a collective bargaining agreement which was renewed and signed on
March 3, 2017. Aside from all benefits mandated by law, the Company provides
training opportunities (internal and external) to its employees. Qualified
employees are also entitled to avail of options under the Company’s Stock
Options Plan.

Figure 6. Number of Stores INDUSTRY OVEVIEW AND COMPETITIVE

9.00%
POSITIONING
8.00%
PHILIPPINE ECONOMIC OUTLOOK
Philippine economy experiences recession due to global pandemic.
7.00% Last year, the Philippine GDP underwent a growth rate of 5.9%, deemed the
6.00% slowest growth in 8 years since 2011’s 3.86%. This year, the country’s GDP is
estimated to grow much slower at a rate of 0.65% due to the negative impact of
5.00% the coronavirus pandemic. However, as a result of the normalization of business
4.00% operations due to easing of the lockdown and a $30 billion stimulus plan, a
notable rebound in GDP growth is expected in 2021.
3.00%
Export and Import sectors remain significant at present times.
2.00% Data from the past years indicated a declining trend in the country's export
1.00% sector. According to the UN Conference on Trade and Development, total global
export may reduce by $50 billion caused by the ongoing pandemic. However,
0.00%
the export and import sector will prove to be essential due to the necessity to
2018 2019 2020F 2021F 2022F
transport goods and supplies.
INDUSTRY OUTLOOK
Figure 7. GDP Growth Rate The Philippine food service industry comprises 92,011 establishments and
includes restaurants, fast food chains, kiosks and counters, cafeterias, and food
service in hotels, bar, cafes, and catering services. Most of these
14.00% establishments are dominated by independent players, some of which have
outlets in stand-alone locations. The growing demand for convenience has led
12.00%
to the expansion of the Philippine food service industry in the form of fast-food
10.00% restaurants and casual dining restaurants.
8.00% Evolving consumer demand. The country’s food service industry has
6.00% continued to improve over the past years due to the stronger consumers’
purchasing power, influenced by today’s fast-paced lifestyle. Food service
4.00% players are increasing their network to cater to more Filipinos who demand for
2.00% more convenience. Full-service restaurants, which primarily target relatively
0.00% affluent consumers with robust spending power, and street stalls/kiosks, which
is capable of responding quickly to changing consumer demand trends,
-2.00%
witnessed particularly notable upturns in performance. The industry saw an
-4.00% intensification of competition noting the increase in competition between
-6.00% categories, as consumer foodservice operators worked to adapt to evolving
2018 2019 2020F 2021F 2022F consumer demand.
Continuous growth in the future. The Philippines food service sector will
continue its steady growth over the next three to five years, propelled by
Figure 8. Export Growth Rate consumers’ stronger purchasing power, a larger middle class, higher
 urbanization, and increasing dining options. The Philippine consumer
foodservice market is expected to see continued growth over 2019-2024, driven
20 by the ongoing expansion of chained operators, particularly in the limited-
18 service restaurants and full-service restaurants categories. The expansion of
16
chains to provincial areas will play an important part in driving growth, supported
14
12 by the use of franchising strategies.
10 Independents dominate but chains see faster growth. The Philippine
8 consumer foodservice market is dominated by independent outlets, primarily
6 due to the strong presence of independent operators in bars/pubs, full-service
4 restaurants and street stalls/kiosks. Of all the food service outlets in the
2 country, chained operators still lead in value terms. Chained operators are
0
exhibiting faster growth than independents across all categories. The fast-food
2017q1
2017q2
2017q3
2017q4
2018q1
2018q2
2018q3
2018q4
2019q1
2019q2
2019q3
2019q4
2020q1
2020q2
category will post the highest growth rate in the years to come expanding by
12% year on year. Fast-food chains are seen to expand their product offerings
to sustain demand even if it encroaches on other food concepts. Among chain
Unemployment Underemployment
players, local operator Jollibee Foods Corporation leads with its wide portfolio
of fast food brands.
Figure 9. Unemployment and Underemployment COVID-19 drawbacks. Philippines’ consumer sector is, without a doubt, one
Rates the sectors hardest hit by the months-long lockdown and prolonged community
quarantine, especially of Luzon where 50% of its population resides and which
accounts for 73% of the country’s GDP (Fitch Solutions, 2020). Majority of the
40 industries under the consumer sector are highly subject to potential downward
35 forecasts. With the restaurant industry being listed as one of the industries
where consumer spending will decline and operations will be limited, they might
30 have to expand their means of operation in order to gradually recover from the
25 sudden decline.
The outbreak and long quarantine restrictions have devastated the Philippine
20
workforce, as they send the unemployment rate to a whopping 17.7% in April
15 2020. This is equivalent to around 7.3M jobless Filipinos. This rate was only
10 5,3% in January 2020 and 5.1% in April 2019. The food service sector is one
among others that have been affected, with a decrease in activities in 35.8%.
5
PORTER’S FIVE FORCES ANALYSIS
0 Competitive Rivalry (High Threat). Jollibee Foods Corporation (JFC) may
2020 2025 face high rivalry among existing firms as market players are strategically
diverse and target the same market. High competitive rivalry can affect JFC’s
status in the Quick Service Restaurant (QSR) Industry by exposing it to
Figure 10. Food Service Market challenges that concern growing and maintaining their market shares.
Moreover, with JFC still having the largest market share among its competitors,
threat from competitors may be mitigated.
Threat of Substitutes (High Threat). JFC’s product selection can be also
Competitive offered by its rivals hence the consumers may use them as an alternative.
Rivalry Moreover, other industries may provide cheaper prices for the same products
6
that are almost the same quality or even superior as JFC’s. Consumers may
4 also opt for healthier options which also makes the threat of substitutes high.
Bargaining Threat of New Entrants (Moderate Threat). Even though the entry in today’s
Threat of
Power of 2 industry requires substantial capital and resource investment, some new
Substitutes
Suppliers
0 entrants’ initial capital investment can be high. If these new entrants will provide
the customers demand for a unique experience, these consumers can easily
switch brands that may be caused by weak or no brand loyalty.
Bargaining Bargaining Power of Consumers (High Threat). As consumers play an
Threat of important role in the industry, they influence business organizations like JFC to
Power of
New Entrants either increase or weaken their profitability. Furthermore, consumers possess
Consumers
the ability to choose from countless fast food suppliers. This means that they
control the buying and purchasing process based on their needs and wants,
may stay the same over an extended amount of time or may vary frequently.
Figure 11. Porter’s Five Forces Analysis Consumers can also control how much they are willing to spend on a given
product which gives them even more bargaining power.
 Major Players Bargaining Power of Suppliers (Low Threat). There are a large number of
Jollibee Foods Corporation suppliers for the inputs needed by fast food companies, so changing suppliers
Mcdonald’s would not be difficult or change production at all. In addition, the availability of
raw materials is readily available not only locally, but also internationally. Due
Starbucks Coffee Company to this, it will be easy for JFC to find a new supplier if needed.
Domino’s pizza, Inc.
Yum! Brands RSC SWOT ANALYSIS
Strengths
Table 1. Major Players • Strong brand name, image and reputation. In over four decades, Jollibee
has grown an ice cream parlor into a burger chain, a full quick-service
restaurant, and a global brand with a store network of almost 6,000 branches inside and outside the Philippines. Currently,
Jollibee is the market leader among fast food chains in the Philippines, claiming a market share that totals to more than half
of the entire industry.
• Wide audience reach. The Company serves a wide spectrum of customers from all economic classes. It is not dependent
on a single customer or a few customers. Neither is there a single customer that accounts for, or will account for, 20% or
more of the Company’s sales. Due to this, the company is able to target more customers and increase brand awareness, as
well as introduce new services, such as home delivery.
Weaknesses
• Risky acquisitions. Building a food empire, the JFC Group acquired Smashburger in December 2018 and followed through
with a buyout of Coffee Bean in September 2019. These two food establishments were making losses before the acquisition
but are expected to become profitable by 2021. However with the pandemic keeping many people indoors, along with the
company's weak expertise in the coffee business, these acquisitions could still result in losses.
• Menu selections. Consumer preferences evolve which means the lack of menu innovations could be a disadvantage as
competition ramps up. Furthermore, for the company’s Jollibee stores, it appears that the food selections are only appealing
to Filipinos but not to some foreigners.
Opportunities
• International expansion and acquisition. While the COVID-19 pandemic has disrupted the food service industry, the
current crisis could also present buying opportunities as restaurant valuations fall and bankruptcies rise. The JFC Group
could use the situation to acquire brands to grow, which in turn would bring them a step closer to their goal of having six
brands in the United States. Additionally, even amidst the pandemic, the company could still open its Jollibee stores in other
countries, especially in cities with a high Filipino population.
Threats
• Intense competition. The JFC Group’s stores compete within the QSR and fast casual segments and other food service
and restaurant companies. They also compete on the basis of food quality and variety, price, value perception, customer
service reputation, location as well as cleanliness and maintenance of stores. Its primary competition includes McDonald’s,
KFC, Burger King (outside the Philippines), and other chicken, burger, pizza and pasta chains, Chinese fast food restaurants,
grilled chicken and Filipino restaurants as well as bakeshops. Competition from independent restaurants, grocers, food packs
and convenience stores offering take-away options has also increased.
• More health-conscious consumers. Many consumers, both in the local and international scope, are trying to eat a healthier
diet. In addition, the rise in popularity of organic products, fresh fruit and vegetables, and goods with all-natural ingredients
are pushing consumers to demand more varied options from the food service industry. If the company is not quick to respond
to these changes, they might lose potential customers.

INVESTMENT SUMMARY
10,000 GR
8% CA We issue a BUY recommendation for Jollibee Foods Corporation’s share with
Net Income ( in Thousands)

9.3 a target price of PHP131.72 using the Discounted Free Cash Flow to the Firm
8,000
method. This represents a 14.44% upside from its closing price of PHP 115.10
6,000 on June 1, 2020. This recommendation is supported by the following:

4,000
STABLE REVENUE GROWTH AFTER RECOVERY
JFC is expected to have a recurring net income CAGR of 9.38% over the five
2,000 forecasted years, with its food service segment still contributing the most to its
net income. By the end of 2020, the food service, franchising, and leasing
0 segments are expected to produce revenues of Php 152.2B, Php 12.8B, and
2020F 2021F 2022F 2023F 2024F Php 0.4B respectively. As the main revenue driver, the food service segment
Figure 12. 5-year Net Income Forecast
 will continue to grow revenues. These revenue and income growths are
expected as JFC plans to capitalize on the current situation by focusing on
Food service Franchising Leasing
deliveries and take-out services and setting up more stores. Income growth is
also supported by JFC’s plans to close down non-performing stores and to build
8% 0%
“cloud kitchens” to reduce rental costs.
EXPANSIONS
JFC has set its eyes on becoming one of the top 5 restaurants in the world. It
has already entered international markets in several countries, with China and
the United States being the top international markets outside the Philippines.
The company plans to equalize the revenue share of its Philippines and foreign
businesses. JFC adopts two main strategies in its global expansion plan of its
Jollibee business: (1) Bringing it to markets with a vast population of Filipinos
and (2) Finding markets with huge potential for Jollibee to become a major, if
not the largest, quick service restaurant even without a big Filipino base.
However, the pandemic has affected its original plan of building 600 stores
worldwide, as they trimmed the number down to 171 stores instead.
92% ADAPTING TO THE “NEW NORMAL”
As the pandemic and quarantine regulations have reduced the number of
people going out of their homes, many consumers have turned to online food
Figure 13. 2020 Segment Revenue Forecast delivery services. Users of food delivery services are anticipated to jump by 34%
from 5.58M to 7.49M on a restaurant-to-consumer basis. Though this will not
offset the loss on sales from its brick-and-mortar stores, JFC has set aside part
(in
2017 2018 2019 of its 2020 capital expenditures on digital commerce and technology to
thousands)
maximize its food delivery services. This is under the assumption that the world
will not revert quickly to its normal way of life even after lockdowns have been
Total Sales 124,663,548 150,200,826 166,909,364
eased.
Foreign STURDY BRAND IMAGE
28,393,359 40,717,384 49,334,270
Sales
Since its establishment at the end of the 1970s, Jollibee Foods Corporation has
grown spectacularly. Jollibee, in particular, is the leading fast food chain in the
Percentage 22.78% 27.11% 29.56% Philippines. Through delivering great-tasting food, adherence to world class
operating standards and the universal appeal of the family values the brand
represents, Jollibee was able to establish a solid brand identity and build
Table 2. Revenue Shares of PH and Foreign
customer loyalty. Today, the company is seen as a reliable and trustworthy
Business
brand, and their prominence in the face of the Philippines’ Quick Service
Industry (QSR) is easily noticeable by any Filipino.

14
VALUATION
12 We used the Discounted Free Cash Flow to the Firm (FCFF) valuation to arrive
at a target price of PHP131.72 per share, with an upside of 14.44% from JFC’s
10
closing price of PHP115.10 on June 1, 2020. Since JFC is a leveraged company
8 with a changing capital structure, the FCFF method was used as this would
6 reflect the fundamentals more clearly than the FCFE method.
In applying the DCF analysis, JFC’s business segments were valued
4
individually before being consolidated into the network share price. The main
2 contributor of the company value is its food service segment, with revenues
0 driven by its numerous subsidiaries located in different parts of the world and
2017 2018 2019 2020 2021 JFC’s continued plan for a global restructure in 2020 despite an expected
decrease in earnings.
Using a weighted average cost of capital (WACC) of 10.35% and a 3.07%
Restaurant-to-Consumer Delivery terminal growth rate, the values of JFC’s business segments were combined to
Platform-to-Consumery Delivery arrive at a share price of PHP131.72 per JFC share.
REVENUES
Figure 14. Online Food Delivery Users
 We forecasted JFC Group’s revenues for each of its segments and arrived with
300,000,000.00
an overall five-year CAGR of 11.5%. This is primarily attributable to the food
R service segment, which accounted for 93% of the company’s total revenues in
250,000,000.00 CAG
0.09% 2019. Meanwhile, the franchising segment and the leasing segment accounted
1
200,000,000.00 for the remaining 7%.
Food service segment. The food service segment is the primary source of
150,000,000.00 JFC’s revenues. The five-year revenue CAGR for this segment is expected to
be 10.20%, relatively lower from its historical revenue CAGR of 13.10%. This is
100,000,000.00 due to the coronavirus crisis forcing all consumers to adopt new habits
surrounding dining at restaurants and eating in general, which might have long-
50,000,000.00
lasting impacts even once the current threat has eased.
0.00 Franchising segment. Fast food brands depend heavily on volume and
2019 2020 2021 2022 2023 2024
transaction count. However, since the pandemic, takeout and delivery are now
expected to be the new paradigm, which makes it less appealing for business
Food service Franchising Leasing venturers to enter into franchising agreements. For this reason, the revenue
CAGR from this segment is expected to decrease to 9% from its historical CAGR
of 19.30%.
Figure 15. Total Revenues
Leasing segment. Even before the breakout of coronavirus, leasing has been
Weight considered as stagnant and conservative. Hence, revenues from this segment
are anticipated to grow at a steady rate, with a forecasted revenue CAGR of
Debt 44,776,043.00 45.32%
8.20%.
Equity 54,028,402.00 56.66%
EXPENSES
Total 98,804,445.00 100%
All expenses are forecasted as a percentage of revenues except for advertising
and promotions expenses. As the company is able to deliver products or
Table 3. Weighted Average Cost of Capital services to its customers in the most cost-effective manner possible without
sacrificing quality, all costs and expenses are expected to rise at a steady rate.
TERMINAL GROWTH
Our terminal growth rate of 3.07%, which is the sum of the expected 2020 inflation rate of 1.72% and population growth rate of 1.35%,
is applied in the valuation. This is justified based on the assumption that, even with the COVID-19 pandemic, JFC will continue to
grow in the future.
WEIGHTED AVERAGE COST OF CAPITAL
The weighted average cost of capital (WACC) is the average rate a company expects to pay to finance its assets and is used to
discount the free cash flow to the firm. To compute the WACC, the cost of debt and cost of equity were first obtained, then multiplied
to their corresponding weights. The cost of debt was based on JFC’s 2019 aggregate interest expense divided by the aggregate short
term and long term debt, arriving with a debt over equity weight of 45.32% and a cost of debt of 4.98% (Table 3). To calculate the
cost of equity, we used the Capital Asset Pricing Model (CAPM). The beta we applied in the computation came from Reuters’s
suggested JFC beta of 1.45, dated June 01, 2020. The risk free rate we used was based on a 10-Year Treasury Constant Maturity
Rate which translates the yield into a Philippine Risk Free Rate.
SENSITIVITY ANALYSIS
In conducting the sensitivity analysis for JFC’s share price, the weighted average cost of capital (WACC) and terminal growth rate
were used as variable components. The company’s WACC at 10.35% and terminal growth rate at 3.07% will yield a share price of
PHP131.72. From this, both increases and decreases in the components were incorporated to illustrate the impact of its
movements.
WACC
11.85% 11.55% 11.25% 10.95% 10.65% 10.35% 10.05% 9.75% 9.45% 9.15% 8.85%
1.57% 91.11 94.43 97.96 101.72 105.73 109.95 114.61 119.54 124.85 130.58 136.79
1.87% 93.73 97.24 100.97 104.95 109.20 113.70 118.66 123.93 129.62 135.78 142.48
TERMINAL GROWTH

2.17% 96.52 100.23 104.18 108.40 112.92 117.71 123.01 128.66 134.78 141.43 148.68
2.47% 99.49 103.41 107.60 112.10 116.92 122.04 127.72 133.79 140.39 147.58 155.46
2.77% 102.66 106.82 111.27 116.06 121.22 126.70 132.81 139.36 146.50 154.32 162.91
3.07% 106.01 110.44 115.19 120.30 125.82 131.72 138.30 145.38 153.14 161.66 171.07
3.37% 109.66 114.37 119.45 124.94 130.88 137.24 144.36 152.07 160.53 169.88 180.25
3.67% 113.54 118.59 124.03 129.92 136.33 143.21 150.96 159.36 168.64 178.94 190.43
3.97% 117.73 123.13 128.98 135.34 142.27 149.75 158.20 167.41 177.63 189.04 201.86
3.19% 107.46 111.99 116.87 122.13 127.82 133.89 140.69 148.01 156.04 164.88 174.66
4.57% 127.12 133.39 140.22 147.70 155.92 164.86 175.06 186.31 198.94 213.23 229.53
PRICE MULTIPLES
While the DCF method was the main valuation approach of this paper, we also analyzed the trailing price relatives of JFC’s
comparable firms in the Food and Service Industry in the Philippines. The size of market capitalization and industry similarities were
taken into consideration in selecting the peers. JFC has consistently shown a higher Price to Earnings (P/E) ratio among its peers,
as also seen with its current 41.4x P/E. This is a clear indicator of better overall performance compared to its peers. We also analyzed
the comparison of JFC’s EV/EBITDA among its peers, which is appropriate in analyzing the value of a CAPEX intensive business.

FINANCIAL ANALYSIS
2017 (As 2018 (As
Restated- Restated-
Note 2) Note 2) 2019 2020F 2021F 2022F 2023F 2024F
PROFITABILITY RATIO
Operating Income
to Revenues 12.93% 12.09% 12.73% 14.80% 13.11% 13.55% 13.82% 13.49%
Net Income to
Revenues 4.86% 4.74% 3.58% 3.57% 4.18% 3.45% 3.29% 3.24%
Gross Profit
Margin 18.73% 17.84% 16.35% 17.64% 17.28% 17.09% 17.33% 17.23%
EBITDA Margin 14.07% 15.40% 14.55% 13.59% 14.83% 13.87% 13.47% 13.50%
Return on Equity 15.54% 15.60% 11.89% 9.97% 12.06% 10.65% 10.82% 11.49%
Return on Assets 5.62% 5.08% 3.43% 3.57% 4.33% 3.91% 4.29% 4.72%
Revenue Growth 20.65% 11.45% -7.90% 11.76% 14.68% 15.54% 16.35%
Revenue Growth
(Food Service) 18.47% 7.72% -9.00% 12.00% 15.00% 16.00% 17.00%
Revenue Growth
(Franchising) 21.23% 17.37% 7.00% 9.00% 11.00% 10.00% 8.00%
Revenue Growth
(Leasing) 7.31% -14.13% 6.00% 8.00% 10.00% 9.00% 8.00%
Net Income
Growth 17.69% -15.95% -8.06% 31.01% -5.33% 9.93% 14.83%

LIQUIDITY RATIOS
Current Ratio 1.20 1.07 0.67 1.01 0.96 0.92 1.01 1.01
Quick Ratio 0.98 0.85 0.53 0.83 0.78 0.75 0.83 0.84
Cash Ratio 0.68 0.59 0.31 0.55 0.52 0.50 0.57 0.58

DEBT RATIOS
Debt Ratio 63.86% 67.45% 72.08% 64.17% 64.13% 63.30% 60.33% 0.59
Debt to Equity 1.77 2.07 2.50 1.79 1.79 1.72 1.52 1.44
Asset to Equity 2.77 3.07 3.47 2.79 2.79 2.72 2.52 2.44
EBITDA to Interest
Expense 7.17 6.82 7.03 7.71 3.08 2.87 2.72 6.78
Debt to EBITDA 3.93 4.09 5.16 4.72 7.94 8.16 7.09 3.00
Interest Coverage
Ratio 5.50 4.94 3.98 4.05 4.51 3.90 3.77 3.73

TURNOVER RATIOS
Total Asset
Turnover 1.16 1.07 0.96 1.00 1.03 1.13 1.31 1.45
Fixed Asset
Turnover 0.18 0.34 0.39 0.44 0.40 0.37 0.34 0.31

Earnings per Share 6.423 7.555 5.887 5.649 7.329 6.834 7.558 8.623
Dividends per
Share 0.0020031 0.0023431 1.9328115 0.0017961 0.0023457 0.0022106 0.0024223 0.00

Table 4. Key Financial Ratios

 REVENUE GROWTH DRIVEN BY EXPANSIONS (Figure xxx)
300,000 JFC anticipates a revenue growth forecasted CAGR at 11.50% which is higher
Thousands

than the historical CAGR for the past three years of 10.38%. Although JFC has
250,000 reported that they already incurred losses in the first three months of the year
2020 and are expecting more in the next quarters due to the pandemic that
200,000 brought lockdown in many parts of the world, their revenues are still expected to
grow at a steady rate.
150,000 Meanwhile, the company’s segments of food service and leasing have historical
CAGR of 10.20% and -5.66% which are expected to increase to 11.82% and
100,000 9%, respectively. This is attributable to the reopening of temporarily closed
stores, the continued expansion of stores, and the increase in rent charges. On
50,000 the other hand, the CAGR for the franchising segment is expected to decrease
from 13.96% to 7.53%. The strong loss incurred in 2020 and slow recovery are
0 most likely the reasons for the fall of growth rates.
2020F 2021F 2022F 2023F 2024F STABLE MARGINS (Figure xxx)
Food service Franchising Leasing In 2019, JFC had a gross profit margin of 16.35% and an operating margin of
12.73%. The gross profit margin is anticipated to increase at a stable rate, with
expectations of 17.64% and 17.28% in 2020 and 2021, respectively. Meanwhile,
Figure 16. Revenue CAGR per Subsidiary the operating margin is also expected to increase to 14.80% in 2020 and 13.11%
in 2021.
20% HEALTH INCOME GENERATION INDICATED BY RETURN ON EQUITY
18% In comparison with 2019’s 12%, the JFC Group’s Return on Equity (ROE) is
16% expected to fall to 10% in 2020. This is mainly due to the impact of the COVID-
14%
19 pandemic which led to the temporary closure of a high number of stores in
the Philippines and markets abroad. In 2021, as the world starts to recover and
12% the temporarily closed stores reopen, the ROE will increase to 12%. However
10% from there on, the ROE will decrease to 10.65% in 2022, but will then again
8% increase to 10.82% and 11.49% in 2023 and 2024, respectively. This is
attributable to the company’s plans to continue expanding its brands both
6% locally and internationally.
4%
CAPITAL EXPENDITURES
2%
The Capital expenditures (CAPEX) in the forecasted period will be driven by
0%
JFC’s store expansions and restructure plans. The calculated 45.34% decrease
2017 2018 2019 2020F 2021F 2022F 2023F 2024F
from 2019A to 2020F were based on JFC's disclosure regarding the operational
Gross Profit Margin Operating Margin constraints brought by the COVID-19. We expect growth capex to ramp up by
2021 onwards as the company prepares for its store expansion plans in the
coming years. We forecasted a total of 488 stores opening by 2021 based on
Figure 17. Margins the average stores JFC opened in a year from 2017 until 2019, disregarding the
values for 2020 as to avoid large variances.

INVESTMENT RISKS
FINANCIAL RISK
2017 2018 2019 2020 2021 2022 2023 2024
Opening of New Stores
JFC has slashed its 2020 capital expenditures budget to 5 billion pesos from
Total 4,972 5,474 5,971 6,142 6,630 7,126 7,620 8,113 14 billion pesos due to the pandemic, but still it will continue to open new stores
on a very selective basis. It expects to open a worldwide total of 171 company-
owned new stores and renovate 96 existing stores in 2020. In order to mitigate
FTY 465 502 497 171 488 496 494 493 possible losses, the company will be preparing for changes that involve the
rationalization of its non-performing stores, store network, supply chain
Table 4. Number of Stores Forecast facilities and management and support group structure. It will also include
building drivers of revenue growth for the future including food delivery, take
out, and drive-thru.
OPERATIONAL RISK
Spike in Delivery Business
Lockdown measures have forced Jollibee to temporarily prohibit dine-in accommodations in the Philippines and U.S., hurting sales
even as the company reported a spike in its delivery business. 2020 will be an extremely challenging year for JFC as they may not
be able to accommodate all orders and deliveries especially when consumers’ demand their products at the same time. In line with
this, JFC will improve its online order and payment systems as well as its delivery service. Also, the company reported that they will
continue to open new stores in prime locations to reach a wider audience.
MARKET RISK
Slowdown in Consumption
Given the lockdown measures and the still growing number of COVID-19 cases, we acknowledged the slowdown that JFC will
continually face throughout 2020 and possibly the years coming. We also acknowledge the potential slowdown that inflation risk
might bring in the prices. Despite that, we believe that JFC can mitigate this due to its good consumer resilience and overall good
domestic results.
EXCHANGE RATE RISK
The JFC Group is exposed to foreign currency risk due to the Parent Company’s investments outside the Philippines, which are
mainly in PRC and USA. The company also has transactional foreign currency exposures, arising from its operations’ cash and cash
equivalents, receivables and trade payables in foreign currencies. Should the Philippine peso depreciate at significant levels relative
to the aforementioned, the company would be put at risk.

APPENDIX 1: COMPREHENSIVE STATEMENT OF INCOME
APPENDIX 2: COMPREHENSIVE STATEMENT OF FINANCIAL POSITION
APPENDIX 3: SEGMENTED COMPREHENSIVE STATEMENT OF INCOME
APPENDIX 4: STATEMENT OF CASH FLOWS
APPENDIX 5: FINANCIAL RATIOS

2017 (As 2018 (As

Restated- Restated-
Note 2) Note 2) 2019 2020F 2021F 2022F 2023F 2024F
PROFITABILITY RATIO
Operating Income
to Revenues 12.93% 12.09% 12.73% 14.80% 13.11% 13.55% 13.82% 13.49%
Net Income to
Revenues 4.86% 4.74% 3.58% 3.57% 4.18% 3.45% 3.29% 3.24%
Gross Profit
Margin 18.73% 17.84% 16.35% 17.64% 17.28% 17.09% 17.33% 17.23%
EBITDA Margin 14.07% 15.40% 14.55% 13.59% 14.83% 13.87% 13.47% 13.50%
Return on Equity 15.54% 15.60% 11.89% 9.97% 12.06% 10.65% 10.82% 11.49%
Return on Assets 5.62% 5.08% 3.43% 3.57% 4.33% 3.91% 4.29% 4.72%
Revenue Growth 20.65% 11.45% -7.90% 11.76% 14.68% 15.54% 16.35%
Revenue Growth
(Food Service) 18.47% 7.72% -9.00% 12.00% 15.00% 16.00% 17.00%
Revenue Growth
(Franchising) 21.23% 17.37% 7.00% 9.00% 11.00% 10.00% 8.00%
Revenue Growth
(Leasing) 7.31% -14.13% 6.00% 8.00% 10.00% 9.00% 8.00%
Net Income
Growth 17.69% -15.95% -8.06% 31.01% -5.33% 9.93% 14.83%

LIQUIDITY RATIOS
Current Ratio 1.20 1.07 0.67 1.01 0.96 0.92 1.01 1.01
Quick Ratio 0.98 0.85 0.53 0.83 0.78 0.75 0.83 0.84
Cash Ratio 0.68 0.59 0.31 0.55 0.52 0.50 0.57 0.58

DEBT RATIOS
Debt Ratio 63.86% 67.45% 72.08% 64.17% 64.13% 63.30% 60.33% 0.59
Debt to Equity 1.77 2.07 2.50 1.79 1.79 1.72 1.52 1.44
Asset to Equity 2.77 3.07 3.47 2.79 2.79 2.72 2.52 2.44
EBITDA to Interest
Expense 7.17 6.82 7.03 7.71 3.08 2.87 2.72 6.78
Debt to EBITDA 3.93 4.09 5.16 4.72 7.94 8.16 7.09 3.00
Interest Coverage
Ratio 5.50 4.94 3.98 4.05 4.51 3.90 3.77 3.73

TURNOVER RATIOS
Total Asset
Turnover 1.16 1.07 0.96 1.00 1.03 1.13 1.31 1.45
Fixed Asset
Turnover 0.18 0.34 0.39 0.44 0.40 0.37 0.34 0.31

Earnings per Share 6.423 7.555 5.887 5.649 7.329 6.834 7.558 8.623
Dividends per
Share 0.0020031 0.0023431 1.9328115 0.0017961 0.0023457 0.0022106 0.0024223 0.00
APPENDIX 6: DCF ANALYSIS

CORPORATE
2020F 2021F 2022F 2023F 2024F
NOPAT 5,905,530.27 7,736,920.87 7,324,535.63 8,051,976.70 9,245,690.00
Depreciation &
12,418,678.23 13,874,214.50 15,910,925.67 18,386,537.00 21,391,510.41
Amortization
Net Working
(2,664,955.67) 540,610.11 532,871.81 (535,451.25) 179,343.56
Capital
Capital
(5,489,129.67) (13,172,740.74) (14,490,014.81) (16,191,064.10) (17,546,061.56)
Expenditure
Free Cash Flow 10,170,123.17 8,979,004.75 9,278,318.31 9,711,998.35 13,270,482.42
Terminal Value 187,720,326.23
Cash Flows 10,170,123.17 8,979,004.75 9,278,318.31 9,711,998.35 200,990,808.65

WACC 10.354153%
Terminal Growth 3.067984%

Year Cash Flows January 1 , 2020 June 1, 2020 June 1, 2020

Total Value of the
2020 10,170,123.17 10,170,123.17 10,608,885.70 firm 175,955,092.18
2021 8,979,004.75 8,136,535.45 8,487,564.33 Value per share 131.72
2022 9,278,318.31 7,618,893.58 7,947,590.19 Price at cut-off 115.10
2023 9,711,998.35 7,226,742.15 7,538,520.45 Upside 14.44%
2024 200,990,808.65 135,525,643.23 141,372,531.51
VALUE 175,955,092.18

FOOD SERVICE
2020F 2021F 2022F 2023F 2024F
NOPAT 5,432,109.04 7,132,183.06 6,770,601.93 7,472,430.84 8,627,995.55
Depreciation &
Amortization 12,379,937.63 13,832,474.40 15,865,133.40 18,336,804.46 21,338,089.61
Net Working
Capital (2,451,317.51) 498,354.62 492,572.24 (496,911.82) 167,361.81
Capital
Expenditure (12,705,756.01) (13,172,740.74) (14,490,014.81) (16,191,064.10) (17,546,061.56)
Free Cash Flow 2,654,973.15 8,290,271.35 8,638,292.75 9,121,259.38 12,587,385.41
Terminal Value 187,720,326.23
Cash Flows 2,654,973.15 8,290,271.35 8,638,292.75 9,121,259.38 200,307,711.64

WACC 10.35%
Terminal
Growth 3.07%

Year Cash Flows January 1 , 2020 June 1, 2020

2020 2,654,973.15 2,654,973.15 2,769,514.81
2021 8,290,271.35 7,512,423.56 7,836,526.81
2022 8,638,292.75 7,093,336.42 7,399,359.29
2023 9,121,259.38 6,787,170.60 7,079,984.77
2024 200,307,711.64 135,065,039.28 140,892,056.04
VALUE 165,977,441.71
FRANCHISING
2020F 2021F 2022F 2023F 2024F
NOPAT 456,422.50 583,216.13 534,391.40 559,279.35 596,093.91
Depreciation &
Amortization 0.00 0.00 0.00 0.00 0.00
Net Working
Capital (205,967.23) 40,751.68 38,877.84 (37,191.72) 11,562.75
Capital
Expenditure 0.00 0.00 0.00 0.00 0.00
Free Cash Flow 250,455.27 623,967.81 573,269.24 522,087.63 607,656.66
Terminal Value 0.00
Cash Flows 250,455.27 623,967.81 573,269.24 522,087.63 607,656.66

WACC 10.35%
Terminal
Growth 3.07%

Year Cash Flows January 1 , 2020 June 1, 2020

2020 250,455.27 250,455.27 261,260.48
2021 623,967.81 565,423.04 589,816.70
2022 573,269.24 470,740.19 491,049.01
2023 522,087.63 388,487.78 405,248.04
2024 607,656.66 409,735.45 427,412.38
VALUE 2,174,786.61

LEASING
2020F 2021F 2022F 2023F 2024F
NOPAT 16,998.73 21,521.68 19,542.30 20,266.51 21,600.55
Depreciation &
Amortization 38,740.60 41,740.10 45,792.27 49,732.54 53,420.80
Net Working
Capital (7,670.92) 1,503.81 1,421.73 (1,347.71) 419.00
Capital
Expenditure 0.00 0.00 0.00 0.00 0.00
Free Cash Flow 48,068.41 64,765.59 66,756.31 68,651.34 75,440.35
Terminal Value 0.00
Cash Flows 48,068.41 64,765.59 66,756.31 68,651.34 75,440.35

WACC 10.35%
Terminal
Growth 3.07%

Year Cash Flows January 1 , 2020 June 1, 2020

2020 48,068.41 48,068.41 50,142.19
2021 64,765.59 58,688.85 61,220.82
2022 66,756.31 54,816.96 57,181.89
2023 68,651.34 51,083.77 53,287.64
2024 75,440.35 50,868.50 53,063.09
VALUE 274,895.64
APPENDIX 7: VALUATION SUMMARY

2020F 2021F 2022F 2023F 2024F

EBITDA 5,905,530.27 7,736,920.87 7,324,535.63 8,051,976.70 9,245,690.00
Working Capital (2,664,955.67) 540,610.11 532,871.81 (535,451.25) 179,343.56
CAPEX (5,489,129.67) (13,172,740.74) (14,490,014.81) (16,191,064.10) (17,546,061.56)
IE 12,418,678.23 13,874,214.50 15,910,925.67 18,386,537.00 21,391,510.41
Cashflow 10,170,123.17 8,979,004.75 9,278,318.31 9,711,998.35 13,270,482.42
WACC 10.35%
PV of FCFF 10,608,885.70 8,487,564.33 7,947,590.19 7,538,520.45 9,334,166.61

EQUITY VALUE
SUM PV of FCFE 43,916,727.27
PV of Terminal Value 132,038,364.90
Value of the Firm 175,955,092.18
Value of Debt 30,052,555.67
Value to Equity 145,902,536.51
Outstanding Shares 1,107,698.27
Value per share 131.72

UPSIDE POTENTIAL
Last Price 115.10
Value per Share 131.72
Return Potential 14.44%
Recommendation BUY
APPENDIX 8: ENTERPRISE VALUE FORECAST

2020F 2021F 2022F 2023F 2024F

Market value
of common
equity 127,496,070,877.00 147,491,284,743.06 178,209,064,471.10 227,202,065,344.31 309,753,448,678.65
Add:
Market
value of
preferred
stock 0.00 0.00 0.00 0.00 0.00
Market
value of debt 30,052,555,666.67 33,697,650,555.56 36,175,416,407.41 33,308,540,876.54 34,393,869,279.84
Less:
Cash and
Investments 26,087,158,380.39 26,861,191,612.92 27,848,143,540.76 29,327,497,982.41 30,638,713,238.27
Enterprise
value 131,461,468,163.28 154,327,743,685.70 186,536,337,337.74 231,183,108,238.45 313,508,604,720.22
EBIT 11,706,667,002.56 15,063,299,304.86 15,246,368,500.01 16,777,318,054.37 19,498,981,669.09
EBITDA 22,478,248,875.99 27,420,047,829.26 29,404,254,161.17 33,005,353,587.68 38,487,884,532.73
Revenues 165,439,196,320.00 184,889,261,119.70 212,039,450,281.11 244,997,948,713.24 285,060,551,305.92
EV as a multiple
of current year's:
EBIT 11.23 10.25 12.23 13.78 16.08
EBITDA 5.85 5.63 6.34 7.00 8.15
Revenues 0.79 0.83 0.88 0.94 1.10
EV as a multiple
of following year's:
EBIT 8.73 10.12 11.12 11.86
EBITDA 4.79 5.25 5.65 6.01

EV/EBITDA
JFC 2020F EBITDA 22,478,248,875.99
PEER MEAN EV/EBITDA 6.98
Relative Enterprise Value 156,839,921,890.68
Cash & Cash Equivalents 26,087,158,380.39
Preferred Equity
Debt (30,052,555,666.67)
Market Capitalization 152,874,524,604.41
No. of outstanding shares 1,107,698,270.00
Target price 138.01
APPENDIX 9: COMPARATIVE VALUATION MULTIPLES

Company Ticker Symbol Mark. Cap. P/E P/BV P/S EV/EBITDA EV/Rev
Jollibee Foods Corporation JFC 127,496,070,877.00 41.14 1.57 0.7068 5.85 0.7946
Alliance Global Group Inc. AGI 59,196,622,031.37 3.74 0.33 0.3470 7.15 1.8673
Max's Group, Inc. MAXS 5,756,971,843.20 6.04 1.01 0.3998 5.47 0.8233
Shakey's Pizza Asia PIZZA 9,295,118,791.71 10.93 1.83 1.1282 7.17 1.7784
Ventures, Inc.
Century Pacific Food Inc. CNPF 54,125,711,331.60 15.75 2.65 1.2453 9.25 1.3260

Peer Mean 9.11 1.46 0.7801 6.98 1.3179

Peer Median 8.48 1.42 0.7640 7.15 1.3260
APPENDIX 10: ANALYSIS OF REVENUE DRIVERS

FOOD SERVICE

Expansion of
Growth in
Economic Food service Increase in Food
consumer
downturns market (quick Service Revenue
spending
casual growth)

Increase in Increase in foot Increase in Food

number of stores traffic Service Revenue

FRANCHISING

Clear market
Increase in
Establishment of position (longer Increase of
Franchising
brand names market workforce
Revenue
presence)

LEASING

Increase in
Clear leasing Increase in
demand in
arrangements Leasing Revenue
specific place
Overall economic downturns and increase in stores will help food service grow.
When the whole economy is in downturn, income is diminished and so is consumer spending. However, research has
proved that quick service restaurants are less likely to be affected since its business model is patterned in a more affordable
and convenient pricing, attracting the market even. With that, sales will tend to increase since consumers opt to use relatively
inexpensive dining options. This could also drive QSR enterprises to expand their market presence on high streets to
capitalize on the new market custom. The opening of new stores is also a given revenue driver for JFC as it would result in
an increase of foot traffic. This would eventually result in an increase in operations.

Established brand image can push the franchise business to grow further.
Owning the property and licensing the brand through royalties and fees has been growing more popular and convenient for
big Quick Service Restaurants, with some enterprises even generating more revenue from it. Having an established brand
name in the industry attracts investors easily, which is why JFC was able to quickly operate in a franchise structure as well.
If JFC’s brand were to continuously grow, they would be able to gain higher market positions and new investors, leading to
an increase in their revenue from royalty fees and set-up fees.

Clear leasing agreements steps up the demand.
As JFC makes contracts with independent franchisees, they will be able to profit off of a leasing structure. Having clear
leasing agreements can drive the individual franchisees to commit rental deals with JFC instead. If the agreements were
consistently set clear, potential increase in the demand for their places could also take place, increasing the revenue in the
process.
APPENDIX 11: JOLLIBEE FOODS CORPORATION WORLDWIDE PRESENCE

ASIA EUROPE
Philippines United Arab Emirates Italy
Taiwan Malaysia United Kingdom
Brunei Hong Kong NORTH AMERICA
Indonesia Vietnam United States
Kuwait China Canada
Saudi Arabia Qatar
Bahrain Singapore
Oman Macau
APPENDIX 12: SCHEDULE OF DEBT PAYMENTS

SHORT-TERM DEBT
Short-term debt consists of USD-denominated bank loans as at December 31, 2019.
Availment Date Maturity Date Interest Rate Conditions Amount
Loan 1 September 23, September 23, LIBOR plus Unsecured 2,532,000.00
2019 2020 spread; quarterly
Loan 2 September 20, September 20, LIBOR plus Unsecured 4,557,600.00
2019 2020 spread; quarterly
Loan 3 September 20, September 20, LIBOR plus Unsecured 4,557,600.00
2019 2020 spread; quarterly
Loan 4 September 20, September 7, LIBOR plus Unsecured 2,532,000.00
2019 2020 spread; quarterly
Loan 5 September 13, September 7, LIBOR plus Unsecured 6,076,800.00
2019 2020 spread; quarterly
Loan 6 March 22, 2019 March 23, 2020 LIBOR plus Unsecured 1,012,800.00
spread; quarterly
Loan 7 August 14, 2019 - August 14, 2020 LIBOR plus Unsecured 911,520.00
December 30, spread; quarterly
2019
22,180,320.00

LONG-TERM DEBT
The long-term debt consists of the following:
2019 2018
Principal 22,682,946.00 26,363,627.00
Unamortized (87,223.00) (99,274.00)
debt issue cost
22,595,723.00 26,264,353.00

The details of long-term debt follow:

Availment Date Maturity Date Interest Rate Conditions 2019
USD-denominated
Subsidiaries
Loan 1 October 21, 2015 October 21, 2025 LIBOR plus Unsecured 3,713,600.00
spread; quarterly
Loan 2 November 29, November 29, 3.0% per annum; Unsecured 1,473,624.00
2016 2024 annually
Loan 3 November 29, November 29, ROP 2121 and Unsecured 392,966.00
2016 2022 ROP 2024 plus
spread; annually
Loan 4 April 25, 2014 April 25, 2019 1.48%; quarterly Unsecured 0.00
VND-denominated
Subsidiaries
Loan 5 February 19, February 20, VIOR plus Unsecured 10,743.00
2015 2020 spread; monthly
Loan 6 December 30, December 20, VND COF plus Unsecured 37,145.00
2015 2020 sprea; quarterly
Loan 7 April 3, 2017 April 1, 2020 VND COF plus Unsecured 92,863.00
spread; quarterly
Loan 8 February 13, March 20, 2023 VND COF plus Unsecured 229,269.00
2018 spread; quarterly
Loan 9 November 15, December 24, Bank's three- Unsecured 404,225.00
2018- October 9, 2023 month COF plus
2019 spread; quarterly
 Loan 10 November 19 - August 30, 2024 Bank's three- Unsecured 118,511.00
December 30, month COF plus
2019 spread; quarterly
PHP-denominated
Parent
Company
Loan 11 December 16, June 17, 2019 PDST-F plus Unsecured 0.00
2013 spread; quarterly
Loan 12 April 21, 2014 April 22, 2019 PDST-F plus Unsecured 0.00
spread; quarterly
Loan 13 April 22, 2016 April 22, 2021 PDST-R2 plus Unsecured 373,583.00
spread; quarterly
Loan 14 December 22, December 22, PDST-R2 plus Unsecured 1,195,200.00
2017 2022 spread; quarterly
Loan 15 December 22, December 22, PDST-R2 plus Unsecured 1,568,700.00
2017 2022 spread; quarterly
Loan 16 December 22, December 22, PDST-R2 plus Unsecured 597,600.00
2017 2022 spread; quarterly
Loan 17 December 27, December 27, PDST-R2 plus Unsecured 448,200.00
2017 2022 spread; quarterly
Loan 18 March 27, 2018 March 27, 2025 PDST-R2 plus Unsecured 4,176,375.00
spread; quarterly
Loan 19 May 11, 2018 May 11, 2025 PDST-R2 plus Unsecured 2,982,589.00
spread; quarterly
Loan 20 August 15, 2018 August 15, 2025 PDST-R2 plus Unsecured 2,683,607.00
spread; quarterly
Subsidiaries
Loan 21 December 21, December 21, PDST-R2 plus Unsecured 109,780.00
2016 2021 spread; quarterly
Loan 22 August 24, 2018 August 24, 2025 PDST-R2 plus Unsecured 993,929.00
spread; quarterly
Loan 23 May 8, 2019 May 8, 2026 BVAL plus 993,214.00
spread
22,595,723.00
Less current portion - net of debt issue costs of Php 17.8 million and Php 3,415,975.00
7.0 million in 2019 and 2018, respectively
19,179,748.00
LIBOR - London Interbank Offered Rate
VIOR - Vietnam Interbank Offered Rate
BVAL- Bloomberg Valuation Service
PDST-F - Philippine Dealing System Treasury Fixing
APPENDIX 13: SEGMENT MANAGEMENT

JFC Group

Food Service Franchising Leasing

Chowking
Greenwich
PHO24
Red Ribbon
Mang Inasal
Burger King
Yonghe King
Hong Zhuang Yuan
Dunkin’ Donuts
SuperFoods
Highlands Coffee
Hard Rock Café
Smashburger
The Coffee Bean & Tea Leaf
Freemont Foods Corporation
Grandworth Resource Corporation
APPENDIX 14: CORPORATE EXECUTIVES & BOARD OF DIRECTORS

NAME TITLE
Tony Tan Caktiong Chairman
Ernesto Tanmantiong President, CEO & Executive Director
CFO, Compliance Officer & VP-Corporate
Ysmael Villoso Baysa
Finance
Vice President & Head-Research &
Chuan Hua Yang
Development
Ignacio Salvador Gimenez Managing Director-Jollibee Franchise
Anastacia S. Masancay Vice President-Special Projects
Susana K. Tanmantiong Chief Procurement Officer
Fernando S. Yu Chief Business Support Officer
William Tan Untiong Secretary & Executive Director
Cho Sit Ang Non-Executive Director
Poe Eng Chua Non-Executive Director
Artemio Villaseñor Panganiban Non-Executive Director
Joseph C. Tanbuntiong Treasurer & Executive Director
Daniel Rafael Ramon Z. Gomez Chief Marketing Officer
Yixing Frank Sheng Head-Internal Audit
Marilou N. Sibayan Vice President & Comptroller-Worldwide
Lorna D. Atun Assistant Vice President-Corporate Audit
Cossette B. Palomar Director-Investor Relations
Arsenio M. Sabado Chief Human Resources Officer
Valerie Feria Amante Vice President & Head-Corporate Legal
Monico V. Jacob Lead Independent Director
Cezar Peralta Consing Independent Director
APPENDIX 15: TOP 20 SHAREHOLDERS AS OF JUNE 20, 2020

RANK NAME EQUITY %

1 PCD NOMINEE CORP - NON-FILIPINO 277,433,668.00 24.68

2 HYPER DYNAMIC CORPORATION 263,218,750.00 23.42

3 PCD NOMINEE CORP - FILIPINO 187,564,584.00 16.69

4 HONEYSEA CORPORATION 127,743,747.00 11.36

5 WINALL HOLDING CORPORATION 54,140,736.00 4.82

6 HONEYWORTH CORPORATION 32,857,446.00 2.92

7 KINGSWORTH CORPORATION 29,168,935.00 2.59

8 CENTREGOLD CORPORATION 27,430,964.00 2.44

9 TANBUNTIONG, GEMMA 21,493,601.00 1.91

10 VENICE CORPORATION 17,423,735.00 1.55

11 A-STAR HOLDING CORPORATION 16,920,393.00 1.51

12 CAKTIONG, TONY TAN 7,126,565.00 0.63

13 UNTIONG, WILLIAM TAN 6,311,389.00 0.56

14 KING, AZUCENA T. 4,792,230.00 0.43

15 TANMANTIONG, ERNESTO 3,952,140.00 0.35

16 TANMANTIONG, ERNESTO 2,501,811.00 0.22

17 TANMANTIONG, ERNESTO S. 1,316,190.00 0.12

18 KING, AZUCENA TAN 1,156,161.00 0.10

19 TAN CAKTIONG, TONY 1,128,000.00 0.10

20 TAN CAKTIONG, TONY 1,100,000.00 0.10