Jollibee Signals Bullish Coffee Business Outlook; Eyes IPO for Highlands Coffee Amid Expansion Plans

Jollibee Foods Corporation's CFO, Richard Shin, expresses strong confidence in the company's coffee ventures locally and abroad, hinting at a potential IPO for Superfoods, the powerhouse behind the esteemed Highlands Coffee brand, especially in Vietnam.

Notably, Jollibee remains keen on pursuing an initial public offering (IPO) for Superfoods, the entity behind the renowned Highlands Coffee brand, specifically focusing on Vietnam.

With around 700 Highlands Coffee stores in Vietnam and approximately 40 Philippine-based stores run by a franchisee, Shin emphasizes the ongoing expansion plans. Even amidst a bustling Vietnamese coffee market with over 100,000 existing shops, Jollibee sees room for further growth.

Regarding the IPO timeframe, Shin points out that the company is not rushing into it. A potential IPO for Superfoods is on the horizon but remains temporarily delayed due to the pandemic's unforeseen circumstances.

In response, Abacus Securities Corporation acknowledges Jollibee's Superfoods IPO plans, which took a backseat during the pandemic. While second-quarter systemwide sales for Superfoods saw an uptick of 7.6 percent, overall sales declined by 8.2 percent due to intense competition and macroeconomic challenges in Vietnam.

Simultaneously, Jollibee Group continues to expand its coffee shop businesses in the Philippines. Despite concerns about brand competition, Shin firmly believes there is substantial room for multiple brands to thrive in the local market, which boasts an estimated annual sales volume of $2 billion.

Over the next three to five years, Jollibee Group will prioritize global coffee shop expansion for all three brands, undeterred by the growing popularity of coffee-on-the-go kiosks. Leading the way is Coffee Bean and Tea Leaf (CBTL), the flagship brand amidst Jollibee's diverse portfolio.

Alongside CBTL and Highlands Coffee, Jollibee recently acquired Taiwan's MilkSha, which specializes in bubble tea. It will also add Singapore's Common Man Coffee Roasters to its repertoire, initially launching in the Philippines.

Shin emphasizes that the Common Man brand will complement the group's existing lineup, focusing on delivering a more premium barista coffee experience.

Meanwhile, Jollibee Group expressed optimism as it anticipates exceeding its annual guidance, driven by a stronger-than-anticipated performance during the second quarter.

According to Shin, the company is well-positioned to surpass its projections, with an expected growth rate of 20 to 25 percent in operating income. This positive outlook can be attributed to the increasing consumer preference for the "great value and great tasting QSR segment," particularly in light of the rising inflationary pressures.

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