MANILA: Jollibee Foods, the Philippine fast-food specialist known for fried"Chickenjoy" and chopped hotdogs in sweet spaghetti sauce, is doubling down on expansion plans in the United States and China that are likely to include more M&A.
Prior to its acquisition of Coffee Bean, the Philippines accounted for 73 per cent of sales while the United States represented 15 per cent and China 12 per cent. It has three brands in China - the Dunkin Donuts franchise, as well as the Yonghe King noodle and Hong Zhuang Yuan congee restaurant chains.Jollibee likes to acquire quite small, loss-making firms at low prices and turn them around. It receives business proposals frequently but acquisitions are more often stumbled upon during one of chairman's Tony Tan Caktiong long food tasting trips than sought out through bankers.
While noting they tend to buy small, Jollibee executives say they are open to any type of acquisition if the food is good. Investor concerns that Jollibee is overextended were exacerbated by first-half profit sliding by a third to 2.66 billion pesos due to losses at Smashburger and deliveries problems with its Red Ribbon Bakeshop. Its stock has lost 18 per cent since late July when it announced its purchase of Coffee Bean.
"Every restaurant in the Philippines has fried chicken, in Vietnam there are maybe 10 coffee shops on every block. In the midst of all of this competition, there's always a standout one or two," said chief financial officer Ysmael Baysa.
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