
Bloomberg
Jollibee Foods Corp., the fast-food chain that controls more than half of the Philippines’ $4 billion market with its signature fried chicken, is looking for acquisitions to accelerate ambitious expansion plans in the US and China. The targets could be other fast-food chains as well as fast-casual restaurants like Smashburger, the US franchise in which Jollibee owns 40 percent, President Ernesto Tanmantiong said.
“We are looking at the world arena,†he said. “The acquisition of new businesses is part of our growth strategy and, over the last few years, we have been entertaining opportunities.â€
Pasig City-based Jollibee is on track to meet its goal of doubling profit in the five years through 2019, and Tanmantiong now wants it to be one of the five biggest restaurant chains by market capitalisation globally. Its current market value is $5.2 billion.
Consumer Spending
The stock rose 1 percent in Manila trading Friday for its highest close in two weeks. The company’s shares have risen 27 percent this year, outperforming the Philippine Stock Exchange Index. Jollibee, which had about $272 million in cash and equivalents as of June 30, operates more than 3,500 stores globally, according to its second-quarter earnings statement. Its best-selling item is called Chickenjoy.
Three-quarters of those outlets are in the Philippines, where the company is capitalising on an economy that’s grown by 6 percent for nine quarters. The World Bank projects that streak to continue through 2019 as consumer spending increases and the population grows at a faster rate than the global average. “Jollibee is well-positioned for growth given its diversified portfolio,†said Noel Reyes, who helps manage $1 billion as chief investment officer at Security Bank Corp. “Its Philippine operations will gain from increased consumer purchasing power while its overseas expansion has huge opportunities. It’s not just a chicken-and-burger stock anymore.â€
Retailers, restaurant operators among biggest gainers from President Rodrigo Duterte’s plan to cut personal income tax: read more. Jollibee generated 21 percent of its 113.9 billion pesos in revenue overseas last year, according to data compiled by Bloomberg. When Smashburger is included, that segment increases to 30 percent, according to the company.
“We are optimistic with the future of the Philippine market,†said Tanmantiong, 59. In Europe, the chain is targeting Filipino communities in the UK, Italy and Spain. Jollibee will open its first stores in Milan and London next year, with plans to push into Japan and Australia by 2020.