Input and Output

Operations

Manager

Customers Materials

Goods

Information Capital

Natural
Services
Human

Resources Resources
Use of Budgeting
JOLLIBEE Foods Corp. (JFC) has set its budget for capital expenditures (capex) this
year to P17.8 billion, 128% higher than the P7.8 billion the company spent in 2021 as it
looks to launch 500 stores.

In a statement on Thursday, JFC said “these capital expenditures will be primarily

funded by cash generated from operations, bank loans and excess cash from the
remaining proceeds from the bond issuances.”

The company is allotting the majority or P10 billion of its planned capex for new stores
and renovating its existing outlets.

“Beyond 2022, our outlook for business growth is even brighter,” Mr. Tanmantiong said.

IMPROVED SALES PUSH Q4 PROFIT GROWTH TO 60%

In a separate regulatory filing on Thursday, the company reported a 59.6% growth in
attributable net income to P3.24 billion in the fourth quarter last year from P2.03 billion
in the same period in 2020.

The company generated revenues of P44.94 billion during the quarter, improving by
22.8% from P36.58 billion year on year. System-wide sales went up 25.2% to P62.03
billion from P49.55 billion.

“JFC’s system-wide sales in its international business in the fourth quarter had equaled
the sales in the same period before the outbreak of the pandemic,” Mr. Tanmantiong
said, adding that Philippine system-wide sales “were still 22.6% lower than those in the
same period in 2019.”

Meanwhile, same-store sales of the company’s Philippine business went up 24.1% year
on year, while same-store sales of its international business went up 9.6%. Its global
same-store sales, on the other hand, went up 18.4%.

Same-store sales in North America grew 17%, sales from stores across EMEAA went
up 5%, and same-store sales of CBTL went up 29.3%.

However, same-store sales of SuperFoods went down 23.2% and the company’s China
businesses also saw an 8.1% decline due to coronavirus disease 2019 (COVID-19)
lockdowns implemented in some areas of Vietnam and China.
Meanwhile, Jollibee generated an operating income of P2.51 billion in the fourth quarter,
“a significant turnaround” from the P2.87-billion operating loss reported in the same
period in 2020.

JFC SWINGS TO PROFITABILITY IN 2021

JFC logged a P5.94-billion net income attributable in 2021, swinging from a P11.51-
billion loss in 2020. However, last year bottom line is still 18.6% lower than the
company’s 2019 income of P7.3 billion.

Revenues grew 18.7% to P153.51 billion from P129.31 billion year on year, while
system-wide sales grew 20.3% to P211.72 billion from P175.97 billion.

The company said the business transformation program it implemented helped push its
full-year operating income to P6.32 billion in 2021 from a P12.81-billion operating loss.

“JFC achieved a profit objective of generating an operating income in 2021 that reached
pre-pandemic level despite its system-wide sales still being behind by 13.2%,” JFC
Chief Financial Officer Ysmael V. Baysa said.

“By business units, the key drivers were the Philippines, with fourth-quarter operating
income equaling that of fourth-quarter 2019, Smashburger, with losses in fourth-quarter
2019 being reduced by 80%, and CBTL which turned its losses into profit in [the] fourth
quarter and total year 2021. CBTL is now a profitable business,” he added.

JFC is operating 17 brands in 34 countries. As of end-2021, the company has 3,220

stores in the Philippines and 2,704 abroad.

Jollibee stores account for 1,520 outlets, CBTL has 1,048, Chowking has 604, Mang
Inasal has 578 stores, the company has 553 Red Ribbon outlets, 483 Highlands Coffee
shops, 394 Yonghe King stores, 269 Greenwich stores, and 245 Smashburger stores.

Just this Tuesday, the company launched its Jollibee branch in West Malaysia with
hundreds of customers falling in line on its first day. The company said all of the
ingredients used for the store’s meals are sourced from Halal-certified vendors.

JFC shares at the stock exchange climbed 0.99% or P2.40 on Thursday, closing at
P244 each.

Typical responsibilities will include the following:

Cost Management & Strategies
1.    Update costs for both Store/Restaurant and Manufacturing businesses to ensure
accurate and timely reflection of margins and profitability   
2.    Forecast costs based on business dynamics and market/industry trends or
developments
3.    Determine costs and margins across the different business units/brands, across
multiple pricing or cost tiers/regions/countries
4.    Recommend pricing based on target margins across businesses
5.    Determine per unit cost for new and existing products, considering all product and
production cost components (raw materials, equipment, labor)
6.    Facilitate activity-based costing
7.    Recommend and manage transfer pricing for optimal overall business results
8.    Assume role of custodian for Menu List and Pricing
9.    Recommend strategies on cost management
10.  Determine and Analyze costs and margin variances

Inventory Control

Businesses that provide both goods and services, such as retail stores and auto-
repair shops, have the same inventory control problems as manufacturers: keeping
levels too high costs money, while running out of inventory costs sales. Technology,
such as the point-of-sale registers used at BK, makes the job easier. BK’s system tracks
everything sold during a given time and lets each store manager know how much of
everything should be kept in inventory. It also makes it possible to count the number of
burgers and buns, bags and racks of fries, and boxes of beverage mixes at the
beginning or end of each shift. Because there are fixed numbers of supplies—say, beef
patties or bags of fries—in each box, employees simply count boxes and multiply. In just
a few minutes, the manager knows whether the inventory is correct (and should be able
to see if any theft has occurred on the shift).

Jollibee's U.S. subsidiary is currently using NetSuite for real-time financial reporting and
plans to deploy more functionality of NetSuite OneWorld in the near future.

With over 1,800 restaurants worldwide and nearly 200 new stores opening each year,
Jollibee has enjoyed dramatic growth since its humble beginnings as two ice cream
parlors back in 1975. In addition to its leading market share in the Philippines, the
company operates 300 international outlets across Asia and the United States .
Geographic expansion, as well as the acquisition of high-profile brands such as
Greenwich Pizza and ChowKing, has given rise to siloed processes and data, fueling
the need for a truly international business operating platform.

"NetSuite OneWorld gives us a way to deliver a standard platform across the

organization in a timeframe and at a cost that supports our continued growth and
development," said Jollibee CFO Ysmael Baysa.
NetSuite OneWorld Rolls Up to Oracle Financials
Jollibee's corporate headquarters uses Oracle for financial management and reporting,
but the company decided that expanding Oracle to Jollibee's international operations
would be too costly and resource-intensive. As a result, the company's broader
business interests relied on a patchwork of legacy systems with no real integration.
Reporting and consolidation were managed over e-mail, making timely and informed
decisions difficult. Processes were opaque, restricting Jollibee from acting as a truly
coordinated international entity.

Seeking a solution with world-class capabilities, rapid deployment, and reliable, proven
integration processes, Jollibee turned to NetSuite. The company quickly deployed
NetSuite OneWorld first in Vietnam, where its flexibility and ease of implementation
were solid proof that NetSuite could accommodate Jollibee's rapid international
expansion.

With current expansion plans calling for a new store location opening every two days on
average, Jollibee needs solutions which provide robust infrastructure on a tight
schedule. NetSuite OneWorld's built-in support for multiple currencies, multiple regions,
subsidiary relationships and rapid deployment make it an ideal choice for a global, fast-
growing business.

Because NetSuite OneWorld has the ability to integrate with Oracle, Jollibee's Manila
headquarters can enjoy real-time visibility into the core aspects of its Vietnamese
operation, including granular performance analysis, online supply ordering, consolidated
reporting and a complete audit trail. NetSuite delivered these benefits significantly faster
and at a much lower cost than if Jollibee had rolled out the Oracle platform in Vietnam.

Strengthened by the success of the Vietnamese pilot program, Jollibee currently plans
to roll out NetSuite OneWorld across its Chinese operation before the end of the year,
followed by Taiwan, the United States and other Asian markets.

About NetSuite
NetSuite Inc. (NYSE: N) is a leading vendor of cloud computing business management
software suites. NetSuite enables mid-market companies to manage core business
operations in a single system, which includes accounting / Enterprise Resource
Planning (ERP), Customer Relationship Management (CRM), and Ecommerce.
NetSuite's patent-pending "real-time dashboard" technology provides an easy-to-use
view into up-to-date, role-specific business information. For more information about
NetSuite please visit www.netsuite.com

Management’s Responsibility for the Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of these
consolidated financial statements in accordance with Philippine Financial Reporting
Standards, and for such internal control as management determines is necessary to
enable the preparation of consolidated financial statements that are free from material
misstatement, whether due to fraud or error.

Auditors’ Responsibility
Our responsibility is to express an opinion on these consolidated financial statements
based on our audits. We conducted our audits in accordance with Philippine Standards
on Auditing. Those standards require that we comply with ethical requirements and plan
and perform the audit to obtain reasonable assurance about whether the consolidated
financial statements are free from material misstatement. An audit involves performing
procedures to obtain audit evidence about the amounts and disclosures in the
consolidated financial statements. The procedures selected depend on the auditor’s
judgment, including the assessment of the risks of material misstatement of the
consolidated financial statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal control relevant to the entity’s preparation
and fair presentation of the consolidated financial statements in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the entity’s internal control. An audit also
includes evaluating the appropriateness of accounting policies used and the
reasonableness of accounting estimates made by management, as well as evaluating
the overall presentation of the consolidated financial statements. We believe that the
audit evidence we have obtained is sufficient and appropriate to provide a basis for our
audit opinion