Jollibee Foods Corporation (JFC) Earnings Call Transcript & Summary

Good afternoon, everyone. Thank you for joining us for today's earnings briefing with Jollibee management for their 2025 full year results. My name is Gio Dela Rosa, and we have with us Mr. Richard Shin, CFO of the Jollibee Group. He is also the CEO of the International Business for Jollibee Group. And with him are the rest of the Investor Relations team, led by Cossette Palomar. As usual, we will begin with a presentation from Jollibee, from management. And after the presentation, we will have a Q&A session. We are a little -- we will be flexible with time today. We will not have a hard stop at 5:00 p.m. and we can extend a little bit if there are enough or more questions from the audience or the participants for this call. I just want to remind everybody that this call is being recorded. I guess I can hand it over first to Cossette for any further reminders about this presentation.

Thanks, Gio. Good afternoon, everyone, and thank you for joining Jollibee Foods Corporation's earnings call. We would also like to thank Regis Partners for hosting today's earnings call. Before we begin, I would like to read this reminder on forward-looking statements. This earnings call may include forward-looking statements that are based on certain assumptions of management and are subject to risks and opportunities or unforeseen events. Actual results could differ materially from those contemplated in the relevant forward-looking statements and Jollibee Foods Corporation gives no assurance that such forward-looking statements will prove to be correct or that such intentions will not change. All subsequent written and oral forward-looking statements attributable to Jollibee Foods Corporation or persons acting on behalf of Jollibee Foods Corporation are expressly qualified in their entirety by the above cautionary statements. So during the presentation, Mr. Shin will walk you through the key highlights of our financial and operating performance. His presentation will also aim to address some of the anticipated questions we typically receive. After the presentation, we will open the floor for a Q&A session. [Operator Instructions] In case we're not able to cover all questions during the call, please feel free to send them to the Investor Relations team afterwards, and we will get back to you as soon as we can. So thank you again for joining us. With that, I will now turn the floor over to Mr. Shin.

Thank you very much, Cossette, and a very good afternoon and for those of you who are taking the effort to join us from other time zones in Europe and the U.S., a very good morning and early morning. So thank you so much for making the effort to join us. And as always, before we get into the financials, I wanted to really talk about the business. And the best way to do that really is to cover what we call top of mind or questions that you've already sent us or have sent us in the past or that we believe are questions that's on everyone's mind. So with that, let's start with, of course, our biggest and most important operation, and that is the domestic business of the Philippines. Now as you know, Philippines has multiple brands, and it is a very vertically integrated business as well with commissaries and manufacturing and distribution and logistics capabilities as well. Having said that, these are the core business drivers that really produced the results in Q4. So again, this is a lens of Q4 performance as earlier in previous calls, I've covered Q1, 2 and 3. So just as a reminder, we have what we call champion brands, and there are 3 of them, and that's a Jollibee brand. So anything in here represents the brand and not the company. So Mang Inasal is the second brand and of course, Chowking. By champion brand, here, I'm talking about those that only produce. So for example, 90% of our top line and profits are coming from these 3 brands, but also in terms of how we allocate capital, other resources and where our focus goes in terms of really driving the core business in the Philippines are coming from these 3 champion brands. Not to say the other brands are not important. They do have a role in the portfolio, but today, we'll be focusing on the key business drivers. So first and foremost, the resilience continues. So resilient top line growth with what we call outsized earnings delivery. What do we mean? We mean top line grew by 9.7% from a system-wide sales view -- and this, again, is Q4 2025 versus the same quarter so putting in seasonality in there versus the prior year of 2024, While operating income grew at an extended 37%, demonstrating once again, strong operating leverage despite the macro and weather-related headwinds that we've talked about in prior quarters, especially Q3. Second, scale advantage and disciplined expansion. Yes, we have grown. Yes, it is a market that continues to grow, and we see significant potential upside in this market, as you can see here, we are 3,504 store network at the end of the fiscal year of 2025. This represents a gross store opening rate of 6.4%, once again, reinforcing the quality and sustainability of our domestic growth. And moving on, growing demand, of course, as I mentioned, we see untapped or underpenetrated regions. And by that, what I mean really are the provinces. So we look at our business in the Philippines roughly through the lens of Metro Manila, which accounts for about 30% of our business and the provinces, which contribute about 70% of our business. In the past, I think the reference I gave was 60-40 or 40-30, with Metro Manila being 40%. And you can see here what's happening, growth happening throughout the country, but the provincial growth is also very significant in that it now has a higher percentage of contribution. And the great thing of that is we're only 15% penetrated with our network in the provinces. So again, as I said earlier, plenty of upside opportunities going forward. Continuing on, let me talk about now our flagship brand in the Philippines, Jollibee. So Jollibee Philippines, and again, I think it's okay to say that we are a market leader with strong brand and channel momentum. So let's put some facts behind that. First, Jollibee opened its 1,300 milestone store in Abulug, Cagayan. And what is important here is this location actually represents our northern most geography of the country. This is important because earlier, I talked about provinces and our opportunity to continue to grow within those regions. So here's an example of that. So today, we now sit at 1,341 Jollibee stores in the Philippines. Jollibee continues to maintain its leadership position with a near 10% system-wide sales growth. And on a same-store sales growth basis, we delivered 5.1% in Q4, following once again, weather-related disruptions in Q3, which I reported that in Q3, our same-store sales growth of 0.7% was not normal, was not a reflection of loss of demand, but was really a reflection of the disruptions, including store closures that we faced in Q3. So now normalized back to regular operations, you can see we're back to a run rate of mid-singles, so 5% is what we've delivered. This, of course, was driven by effective seasonal campaigns, new store contributions and also resilient core demand. Now on the brand itself, so the brand strength translated into -- if we were to look at share gains, and this, again, is a measure by Kantar, third party, and we look at the Metro Manila region where we're very competitive. And I won't mention names here, but our latest polling is that our value share spread or lead is now 8.1 points above the next key competitor. This is, of course, clear evidence of outperformance versus our key competitors. Next, the Christmas Big Order Service -- I'll try not to butcher this -- Buo ang Pasko. This campaign captured, of course, group occasions with nearly PHP 1 billion uplift on our system-wide sales, which is about a 5% uplift versus last year's seasonal same period, Christmas, while festive activations across more than 300 Christmas theme stores elevated brand presence nationwide. Now let's continue with that. Operating leverage maintained a standout as business unit operating income grew by 17% year-on-year same quarter, supported by cost discipline and of course, as I mentioned earlier, about our vertical ability through our commissaries. Digital and convenience channels also scaled with digital sales up 80% and drive-thru sales up 20%, once again reinforcing our structural growth drivers and also our past investments in these technologies. Broader rollout of self-order kiosks or SOKs, as we call them. We deployed this now in 750 stores as of year-end. Now let me again put it in context. We're talking about the Jollibee brand in the Philippines to which we have just over 1,300 stores, as mentioned. And so that means there is still roughly just less than half, more to go in terms of SOK rollout. What's interesting here is on average, our SOKs are delivering a 9% average check uplift. So as we continue to roll SOKs out, we can also anticipate that from the same store, we'll get more productivity from average check point of view of 9%. The new Jollibee app, which was launched not too long ago in September, it reached 4.2 million download stats in the first 5 months since launch. And this represents a 26% growth in monthly active users. And I'll come upon this a little bit later in terms of impact. Strategic partnerships also underscore ROIC discipline with Jollibee Kids Party expanding by 146 out-of-store venues. So what we're talking about here is the thematic or the theme or the platform that we own, which is the Jollibee Kids Party, which today predominantly was in our stores. We've now taken this out of our stores into other venues with no incremental CapEx. And this is a very interesting sub new channel, and this delivered a 23% growth through partners like Kidzoona and Timezone. Nothing really tells the story better than pictures. So this, again, is our Jolly Christmas campaign. There's a few themes or thematics that we put out there. So first, of course, is the TV and other above-the-line ads and campaigns. We've also rolled out merchandising, which was very successful in carrying our brand out. And of course, we also had some promotions through the big order service. And then finally, you can see here, as mentioned earlier, more than 300 stores. As you can see, some more examples were themed up for Christmas season. Of course, what all this means, it means it's generating heightened brand awareness and also attractiveness for consumers to come and enjoy this experience through their dine-in. So the apps, again, are rating out of 5 for both Android and Apple. Here, you can see 4.8 and 4.9. So a pretty significant positive appreciation from consumers. So we'll continue to monitor this, and we don't have the exact data at the moment. But of course, from our experience, we know that loyalty programs and app downloads increase frequency, but also, in most cases, increase order size as well. Okay. Let's move on to our second core business driver, and that's Mang Inasal. Very interesting brand. This is the brand that has the highest franchise percentage in our portfolio. We're around 98% of our stores are franchised. And of course, that gives us a very strong unit or box economics to be able to scale. So let's go into the data. Mang Inasal delivered consistent double-digit system-wide sales growth, around 16% for the full year. In the fourth quarter, we had a high of 21% system-wide sales growth. This, of course, was driven by disciplined and accelerated franchise store expansion as well as same strong store sales driven by traffic and as well as our products really coming out and shining. And I'll show you a little bit more as we go through this. The outstanding unit economics and by that, I mean, we're now circa 3 years or better. This, of course, continues to support confidence from our franchisees. Some are new to this franchise and some are multiunit franchisees that have already taken on some of our other brands in the portfolio. All right. In terms of expansion, we've added 42 new franchise stores in 2025. That represents a 7.3% NRG rate, and we now stand strong at 606 locations. In the past, I've always spoken about this brand being around a 500 store brand, but we've now entered the next level of 600. And of course, because of the strong economics, both the robust top line growth, which also is driving the bottom line profit, this brand delivers a 32% OPM or operating profit margin for us, given that it is very highly franchised. Continuing on, let's talk about the brand equity for a little bit. So the brand equity and reinvestment are reinforcing momentum, of course. What I mean by that is every time we renovate a store, we're starting to see very interesting data points, nearly 2x in terms of same-store sales growth versus the national average. So we'll continue to renovate and upgrade our stores and through that, get more productivity from the existing assets for the franchisees. Mang Inasal delivered its most awarded year-to-date as well, 57 awards in 2025, including 6 Gold trophies at the International Business Awards. So putting this in context, we were the only Philippine restaurant brand to achieve this distinction. This also, again, makes a strong case that Mang Inasal has legs to go beyond the Philippines one day. And of course, all this is because of our strong team behind the brand. It's also the brand equity that's getting strengthened and built. It's the marketing execution. It's also the consumer relevance of this brand. And so therefore, Mang Inasal crowned by Brand Finance, which is an independent third party as the strongest -- so it came in first -- strongest ASEAN restaurant brand for 2 consecutive years. And today, again, it's only in the Philippines. So again, visuals. I think it's pretty clear that what this brand really represents, it's very tasty, very affordable food, and it's grilled chicken, and it has a second leg with barbecue grilled pork as well. So those are our best sellers. And of course, we take the opportunity with LTOs to really produce additional excitement from time to time as we continue to build our core. This is very interesting. Earlier, I talked about the network scaling up to 606, but I didn't give context in terms of the store types. So a brand that traditionally did not have drive-throughs, we are now in a position because of the strength of the brand as well as the box economics that we are able to build drive-throughs for our franchisees or I should say, the franchisees are building drive-throughs. And this is very important because, of course, we understand drive-throughs will have higher ADS and on average, it is 40% higher versus our average stores. So here are some examples of ADS and also what these beautiful stores look like as a drive-through. All right. Let's move on to pillar #3 or driver #3, and that is Chowking. What is Chowking? Chowking is a clear market leader in the Filipino Chinese segment in the Philippines. I think most of us know that, but let's put some data to this now. Chowking delivered a 6% system-wide sales growth, supported by improved average check from upselling. So 23% on value meals and 53% on sides. So it's very product-driven brand, of course. And you can see that there are plenty of opportunities to grow this brand through relevant menu and menu programs. Also, in the provinces, we're starting to see some growth. But what's interesting here is we're only 5% penetrated in the provinces. So again, another area for significant growth for us. Network expansion-wise, 35 new stores added, representing 6.1% growth and 100% of these 35 stores were franchise stores. So we've already moved on this brand to a 100% incremental franchise business. So we're keeping with the theme of asset-light and shifting to a franchise model in the Philippines. Smaller pictures, but it just gives you a flavor of the various Chowkings that we've opened in different parts of the Philippines. All right. Moving on with Chowking. We can see here that the profitability of Chowking also continues to improve along with its network and the top line growth. And in fiscal 2025, we've also increased our sentiment score. So in the past, there are some areas of improvement. And you can see here steadily over time, we've now increased the sentiment rating up to 78% from 56% only a few years back. So once again, menu and brand refresh is gaining traction and the repositioned Chow Fan and the Lauriat chicken platforms are really driving our mix improvements and opportunities. I'm actually getting kind of hungry, so sorry, take a sip of water. International operations. So now let's shift focus to outside of the Philippines and see what's happening there. Let's start again with our flagship brand, Jollibee. So this is Jollibee across all of our markets where we're present. And specifically, they are Vietnam, Hong Kong and Macau, the U.S., Canada. And within EMEAA, it's the Middle East, it's Southeast Asia and some parts of Europe as well. And you can see by the same-store sales growth, we're growing both through -- sorry, system-wide sales growth, we're growing both through system same-store sales growth, but also through additional new store openings. So Vietnam is that example. We are clear #1, and I have a bit more on Vietnam later. But these are real numbers. They are unusual, I know, to see system-wide sales of 50.8%, but this is what's happening on a very strong fourth quarter of 2024 as well. We continue to expand. We continue to see opportunities for new locations as well. And the same-store sales also continues to grow. I think a few things happening. The brand is getting traction, of course, our marketing campaign, which is very I would say, robust compared to our competitors. We're very active out there. But also, we're seeing some of our competitors closing perhaps in the same trade area, and we're also picking up from those opportunities of chicken eaters who are now coming into our brand as well. So different combinations of marketing campaigns, which are very relevant and are quite sticky in Vietnam, but also through good trade area locations. And of course, last but not least, the taste superiority that we continue to deliver with our variants of Chicken Joy, spaghetti and other products. Hong Kong and Macau also continues to grow double-digit pace. In the U.S., I'll show you some data later, but these are ahead of industry. So top of, if you will, growth that we're seeing both in system-wide as well as same-store. This is to say we continue to open stores in the U.S. as well. We opened another 4 in the year. And of course, our same-store sales growth continues to represent the traction we're getting in terms of brand awareness, but also accolades of winning awards like Best Fried Chicken for 2 years in a row, which, of course, is creating curiosity from the consumers and they're coming to dine with us. Canada, similar momentum and rest of EMEAA, we're seeing that as well. And we put here some of the peers just for comparison. These are multi-brand peers. These are global peers and single brand peers and their growth rates just so we get a context of where our business is. We now have reached a footprint of 536 stores or nearly 12% increase in our NRG. So North America, there are 3 topics I'd like to just update them on. First is the organic growth that we're seeing. So again, this is the consecutive -- we're seeing 5 consecutive years of positive same-store sales growth. We're seeing from 14,000 up to 14,005, we're now seeing $15,000 as our average daily sales in the quarter. And this continues to be driven by traffic. And we're also seeing consecutive quarter growth at 11% in Q1, all the way up to 19% growth in Q4, landing us on a year average of 15%. So some phenomenal output from the team. Second, franchising. I think I've earlier mentioned to you, we've opened our first franchise store. This takes quite a bit of work in terms of permits and license and the rest, but we're now starting to see some fruits coming through. And of course, it's not linear. We will see an acceleration of new store openings from the past efforts of getting all that done. But what's important here is our Queens store sits at 16,000 ADS. So holding its own, in fact, slightly higher than the national average of 15 and 50% of that store in Queens, New York, of course, is mainstream patronage. What is new here is an update in terms of what we have in the pipeline. So by year-end of 2025, we've secured 6 multiunit franchisees who have now committed to 72 store development plan and some details here, 25 new store developments supported by 2 new NUDAs or multiunit agreements here and planned openings across places like Oklahoma, and San Francisco Bay Area. And more details to come, but it's starting to really grab some traction now. We've also, for the first time, onboarded a Head of franchise for the Canada market, which is, at the moment, 100% company-owned store. So we have Peter Wright, North America Head of Franchising, takes care of the U.S. We're looking into Mexico, and we've now onboarded someone to look fully into Canada. So more to come on that. Digital initiatives and customer loyalty, again, similar to what we saw in the Philippines with the app and loyalty launch. In the U.S., we recently launched the loyalty app as well, and it exceeded our internal targets actually, surpassing 1 million users by the year-end. And this, of course, comes with everything we expect it to come with, which is frequency and above average check size as well. It's also scored a 4.9 rating on the App Store rating. So we'll continue to be relevant and continue to attract new consumers into our brand in the U.S. Let's shift to Vietnam and EMEAA quickly. So Vietnam, again, we are now at 245 stores at end of December. The number is slightly higher in March, but end of December, it's 243. Continues to grow and momentum of double-digit growth continues in Q1 of this year. And some of the accolades here or recognition, I think, is very interesting as the brand starts to get well known in Vietnam. In Europe, Middle East and rest of Asia, we're seeing strong top line growth as well. And here is a demonstration of mainstream patronage or gen pop as we call it sometimes, the locals. So in Hong Kong, it 70%. And you can see a high of 100% in Brunei, 90% in Malaysia and 90% in U.K. and Singapore is at 85%. Some accolades as well, further recognition in multiple markets. Okay. Now let's move on to a different segment. So coffee. Compose Coffee recently got a market recognition as being voted by consumers as the #1 overall customer satisfaction brand in Korea amongst value coffee brand drinkers. And so of course, we're head-to-head with other brands like Mega in Korea, but we managed to come in #1. And really, a lot of that has to do with our products and, of course, the quality of our coffee-based drinks, in particular, Ice Americano. We've also had a very bullish store network expansion and growing system-wide sales by 24.2% in Q4. And there's some details here in some of the product launches that you can see on the right-hand side. The reason why this is relevant in a market like Korea is you have to constantly be putting out there LTLs that actually are relevant and are seasonally relevant as well. And so as we know the market very well, and we have 100% Korean employee base in Korea, we're very confident that we'll continue to put products out there that are relevant. Compose Coffee also signed a major master franchise agreement with the Philippines, of course, leveraging our capabilities and network through JFC here in the Philippines. We've also been recognized for some other tech-related and craftsmanship-related accolades. So again, business, brand traction, portability outside of the Philippines, all this continues to gain and add momentum to this acquisition, which is just over a year old. Highlands Coffee, as we know, it's been about 25 years in the market, and it's now the undisputed #1 cafe in the Vietnamese chain or cafe chain space. In the key markets, we have 30% market share, 35% brand equity share. And of course, compared to the next competitor, which is important to look at to see how far the next competitor is, we're multiples ahead, which is to say perhaps the next 3, maybe 4 competitors combined would equate to about the size of Highlands Coffee in Vietnam. The superior expansion point here is around the speed in which we're opening new stores. So we've opened 174 stores in fiscal 2025. And as in the past, I've always talked about the high ROIC of these stores. These are company-owned stores because of the relative low CapEx price and also the fast return. In terms of performance, you can see 8.2% same-store sales growth, an average of 40% ROIC on the stores, and we're up to around 22% store level EBITDA margin for the year. We've also announced that we are looking to IPO this business in the very dynamic market of Vietnam. So I think all this data is very important as we build momentum to IPO date. We're also vertically integrated. We have a state-of-the-art roasting plant that has capacities well beyond where we are today. That is to say that while we have unused capacity, we can take on businesses such as CPG or overseas packaged goods opportunity, which as the brand gets stronger, the demand is coming in from places like the U.S. where we do have key account customers. But the plant really was set up so that it can handle a much wider network of cafes in Vietnam. Okay. CBTL. CBTL in terms of store expansion, we're now in 23 markets. And what's interesting is 90 of the last 118 store openings were under franchise format. The balance, of course, is really in markets like Malaysia, where we continue to be 100% company-owned. Again, very strong performance in Malaysia and very strong team and also very strong ROIC on our store openings. We also are opening in nontraditional spaces. So in the U.S., for example, Dallas-Fort Worth Airport, which is the second busiest airport in the U.S. that opened in November, and we continue to look for more opportunities across. In Southeast Asia, we have a 39% gross opening rate in places like India and Pakistan. And the Middle East, we have a fairly large footprint with 19% new store opening rate as well in places like Kuwait and Saudi Arabia. Secured area development agreements for 70 stores in the UAE for the next 5 years has been signed, and that starts in early this year. Moving on to customer loyalty and some digital initiatives. Again, similar to the Jollibee brand, we've launched app programs, and we're starting to see some good traction, as you can see here in terms of reach and in terms of also the system-wide sales generated through the app. And then we continue to receive accolades as well in various markets like Malaysia and Kuwait and so forth. So we're proud of all those accomplishments for the quarter and the year. Smashburger, again, I said that we have a path to financial viability. And this really -- if one word describes it, it's about conversion. It's about our ability to convert our company-owned stores to franchise. So what we've done, and I'll get into a bit more details later, but we've started that journey, and we've started that journey also with increased footprint as well in places like nontraditional channels. So let me start with the most recent accolade, which is Smashburger coming first or topping the list of Eat This, Not That, which is a reputable ranking in the U.S. as the best cheese smashburgers. So we're happy to see that ahead of some of the other big competitive brands in that space. We also, as mentioned earlier, launched a high low price strategy. So everyday $4.99, but anchoring to that, our ability to still sell at high frequency and high rates. Our burgers have made us famous. And so we continue to do that. So in terms of ADS, we're up 7.1%, and this is Q4 versus the prior quarter of Q3. We're up in terms of traffic, 8.9%. We're up in terms of NOI loss, so less losses of 11.7%, and we're up in terms of EBITDA as well, 14.4%. China, you can see here at the bottom left, same-store sales growth, and this goes back to Q4 of 2024 and then all the way through the progression that we're seeing. So what's important in China really is. And I'll speak about store closures later as well, but we're really pivoting and where there's opportunities to get out of company-owned stores, we are, where there's opportunity to get out of regions and geographies where rent is a hurdle, we are, and we are starting to implement the new store design model. This is the one that's giving us less than 2-year payback, a run rate at around 1.5-year payback and we're doing that in residential areas in particular. So a couple of highlights. So December represented a 32 new franchise store opening and compared to the average monthly run rate of 10, this really starts to demonstrate that this new model is taking traction with our franchisees. Tim Ho Wan, our newest brand. So let me talk about it a little bit. So first and foremost, post acquisition. So we took this brand on in January of 2025. So Q4 really is the fourth quarter of the first year. And here, we start with the point right to win. So what is that? We brand positioned ourselves and brought Tim Ho Wan really back to its roots, and that's really the Taste of Hong Kong. And this brand positioning is a relevant one because authentic dim sum from Hong Kong does actually have a lot of credibility in different parts of the world. So we start with Hong Kong. Hong Kong footprint doubled from 5 stores to 10 stores in 1 year. And the last 4 stores that we opened are delivering an unheard of quick payback of 1.5 years. We figured it out. We figured out that the right mix of office to residential, which then gives us a better spread during the weekday on Monday to Friday, but also over the weekend. We've also figured out what the right rent as a percentage should be. So we're getting the right size stores built. We figured out procurement, how to be able to build these stores cost effectively. And of course, most importantly, we figured out menu pricing and brought everything back to quality, really back to what the brand started as in 2006 when it started in 2007 when its first Michelin star. Why is this important? Hong Kong is important, of course, but this model really, the proof of concept then allows us to transport this to other places. And the one I want to talk about here really is Irvine, California. So we're now reentering the U.S. TAM in a meaningful way. And I'll show you a little bit later what some of that graphics looks like. Execution consistency. We're starting with leadership. So we have new leadership in this brand. We've now started to bring on the key function heads and chefs and all the key roles. So it really starts with that. We are scripting all the processes, everything from store design, menu design, but also customer service. So when we do open stores, that goes right into our training playbook, which has all been developed out of Hong Kong as we've opened these stores pretty rapidly, and we've taken that now and we're transporting it and sharing it with our franchisee markets as well as with our company-owned store markets of Singapore and China and of course, the U.S. So today, we're present in 11 markets and with 83 stores. But to me, this is really ground zero. So plenty of upside in this brand. In terms of performance, Tim Ho Wan's contribution to global system-wide sales doubled to 2%. So in very early stages with 83 stores, we're contributing 2% to JFC's top line. And in terms of EBITDA, we were not contributing in the past because it was sitting in a fund, so we did not consolidate any of the financials. But starting from 2025, there is a $400 million contribution to EBITDA. So the visual on the left is a pre-store opening. So this is a typical Saturday where you see lines starting before the restaurant opens. And then on the right, you can see the size of the restaurant and also the relative spacing compared to, let's say, restaurants in Hong Kong because in the U.S., there are more stringent rules around spacing between tables, et cetera. But this is a real live shot of business in action. And this will be a typical weekend, for example. So again, high customer traffic and the dining space to be able to take this on. So we'll continue to improve our turns in this restaurant, but I'm excited to personally see it in March when I'm in the U.S. Recent strategic actions that we've taken to unlock shareholder value across global portfolio. So on January 6, Tuesday, we've announced our contemplated spin-off and U.S. listing. I think much was said and discussed about that. That's really about unlocking the opportunity of some of our assets when we group them together in international. We've also announced a very I would say, high ROIC, quick payback bolt-on in Korea. We have the infrastructure. We have the team. We have the capability now to be able to bolt-on businesses like this, which on an annualized basis, we'll see a 2% uplift in our group revenues and an 8% uplift in our group EBIT. We've also announced our Compose Coffee entry into the Philippines. So more on that coming. And of course, we've announced the value creation opportunity with the Highlands Coffee IPO in Vietnam. All right. Let's get on to the financial highlights. So as always, this summary table here, left to right. So system-wide sales of PHP 122.3 billion in the fourth quarter, representing a 12% growth, produced a net operating income of 41.9% with a very strong OPM of 5.1% margin rate. And later, I will explain the bridge between this PHP 4.1 billion and PHP 2.2 billion net income after tax. And as you can see by the title, it's due to tax and it's due to interest component, but I'll get into that later. System-wide sales -- sorry, same-store sales growth, I've mentioned earlier as well, a good healthy split between TC and AC. AC in Q4, for example, in our biggest market, Philippines, we've only taken price by 0.1%. So this is really coming through mix, mix within the markets and also mix of markets as this is a global view. Okay. So where does that put us in terms of the 5 KPIs of same-store sales, system-wide NOI, net income after tax and store growth or NRG. JFC, we are the highest in 3 of the 5 categories, if we compare it strictly by growth rates against our peers of Yum!, McDonald's, RBI, Chipotle and Starbucks. So the highest is coming from system-wide sales, NOI growth and new store expansions and a pretty close second in NIAT and a pretty close second here in same-store sales growth. Okay. So summary of the financials, so from revenue to NIAT. I think I showed all of this. So let me get into a little bit of the details of the components of that. Just checking time. Yes, just my fault on time so let me accelerate here. So first, let's talk about taxes because one of the reasons why that gap increase is because of the higher current taxes, of course, and provision on current taxes, of course, is correlated to operating income. So that was about PHP 0.5 billion impact. And also, we had deferred tax credit decrease. So that is to say in 2024, Q4, we had the upside of a deferred tax credit, whereas we had less of that in 2025 Q4 and 2 main reasons there. So this PHP 0.7 billion is really broken down by PHP 0.4 billion, representing the decline in intrinsic value of stock options. So the employee stock options, when we looked at the stock price, we were able to recognize that this would have a deferred tax income not avoidance unavailability, if you will, tax credit unavailability. So that was coming from that. Again, this is not business related. This is employee stock option value that will change in the future as the share price changes. So it's not a reflection of any slowdown in the business. And the second point here is the NOLCO or NOLCO deferred tax asset, again, because we've changed our direction, our franchising as a strategy direction, in particular, Mang Inasal's royalty income in the past was recognized as passive, i.e., royalty. But now, we're recognizing it as active, i.e., revenues. And so therefore, there is a deferred tax impact related to the NOLCO on that. Okay. I think the other question that's on everyone's mind is what drove the savings, the cost efficiencies reflected in Q4. And really, that's PHP 800 million of savings. So if you look at G&A plus A&P as a percentage of revenue. You can see in Q4 of 2025, we were at a low of 13.2% versus the same period last year at 15.6%. That PHP 800 million savings really is broken down to G&A and A&P. So PHP 500 million is really cost controls. And the PHP 300 million, if you remember, a few years back, we would have quite a bit of Q4 adjustments on A&P because of the catch-up of agency billings and other sort of late billings. We've cleaned that up, as we said we would clean it up. And so now it's a more smoother 2.5% A&P rate, and that's really reflecting that coming through. Now let's talk about EBITDA because on a full year basis, international contributed 36%. And on Q4, that contribution percentage decreased to 28%. And in particular, it's China, CBTL and Compose. You can see the numbers here, okay? So let me one by one explain that because I think people want to understand, is this systematic? Is this a run rate issue? Or were there some notables or nonrecurrence in here to explain. And so let's go one by one. So in the case of China, earlier, I mentioned that I'll come back to this point. As we pivot into more residential, smaller footprint, higher returning quicker payback store model, we are getting out of company-owned store locations. So we've closed 121 stores in the year, of which 48 came in the fourth quarter. And related to that and IFRS adjustments, that is to say those corrections were put through in Q4. CBTL, this is legacy. This is even before we bought the business in 2019, but there were some old provisions in the past for labor disputes. And so we're now cleaning that up and settling for our past labor issues, and that tune of 139. If you were to adjust that onetime event out, our normalized growth would have been 6% for Q4 and 19% for full year on an EBITDA basis. So that's that. Compose Coffee, there's a few things. So of the PHP 300 million impact, PHP 100 million is really coming from a onetime audit prior period tax adjustment and phasing impact. So in Korea, every quarter, we would accrue for water wastage levy, which we paid to the government. And this goes to assist the municipalities in terms of infrastructure that they need to create for restaurants and so forth. That was never booked. So we did a catch-up in the fourth quarter. Again, it's a timing thing. So it's not business related. The second part is semi-business related. That's really our choice to defer coffee being price increase impact to our franchisees. And of course, this, as I explained in the past, is very much in line with the market practice in Korea. That's about PHP 200 million. By not taking price, we've also gained on volume, and we've also gained on new store openings. As mentioned earlier, our top line driven by new store openings was near 24% growth in the quarter. So this, of course, today, when we look at bean prices, sub-$3, so it's come down quite a bit since this point in time in Q4. It's now, I think, $2.97 around that range. So I think this was the right decision to take, and we'll continue to drive growth through volume and taking care of our franchisees. So that's what happened in Compose. So again, it's not due to a slowdown in the business, but it's rather our choice to defer passing on all the pricing in lieu of trading it for volume. Quickly, cash flow and financing costs. So let me just talk about the key items here. EBITDA margin rate, we're slightly up from 2024 at 13.7%. Our CapEx, we spent PHP 15 billion. But of the PHP 15 billion, there's nearly PHP 3 billion that is what I would call nonrecurring. So that is for capacity expansion, for example, in our commissary and other capacity expansion requirements. So if you were to normalize that, we're probably running around PHP 12 billion in CapEx. So that's that line here. Free cash flow from operations, it's PHP 21.6 billion, so in line with the previous year. The big improvement here is free cash flow, excluding lease payments. We're significantly up versus a year before. And for transparency, we've shown you both the rates before and after lease payments. So this is the IFRS 16 adjustment. So opportunities to increase this number, of course, but a significant improvement from a year ago, nonetheless. Financing costs, again, I'm just going to try to simplify this a year, a quarter, same quarter a year ago, we were sub PHP 1 billion. Now we are slightly above the PHP 1 billion, but I want to point out this accounting reclassification change. As many of you know, we had a USD 300 million perpetual bond, which we've refinanced through different instruments, and that is through term loans, of which half are floating and half are fixed rates. So we want to make sure if interest rates move in one or the other direction, we are semi hedged or benefiting from those movements. So when that happened, we started to then record the interest expense related to the term loans versus the perps where it was not recorded as financing cost, but it was adjusted to our earnings per share. So over here, the number is PHP 86 million, and that really represents that, if you will, movement. And that is to say our level of financing cost is around PHP 1 billion. And key points here is we continue to pay our principal and interest on time. So we reduced that by PHP 100 million during the quarter. Now this Compose acquisition financing. So roughly, we acquired Compose half cash and half through a term loan. And that, of course, is giving us really fantastic yields. So not so worry about this number, but this will eventually be drawn down to 0. So those are the major movements on the financing cost. And this is the same thing, but on a full year basis, so about PHP 1 billion per quarter. And of course, the perpetual bond financing number is larger when you add the other 3 quarters. And that is to say, in terms of our financial covenants, we are way below our maxes, and we are above ours. Now let's move on to guidance. So for 2025, we guided 8% to 12% on system-wide. We ended the year at 60.6%. RB growth or same-store sales growth, we were within same -- sorry, store network expansion, we're ahead of what we guided. CapEx spend, we were under. So that's achieved and normalized again, that's around PHP 12 billion to PHP 13 billion normalized. And operating income, we guided PHP 10 billion to PHP 15 billion and we ended the year at PHP 19.3 billion. Going forward, 2026, our guidance is still very aggressive, double-digit ceiling. And so it's 8% to 12% on system-wide, 4% to 6% on same-store, network growth of 1,200 to 1,300 on a gross opening basis. And for CapEx, we reduced our range to PHP 13 billion to PHP 16 billion and operating income growth, we continue to hold double digit of 15% to 18%. We have a disclaimer here in terms of what's happening in Iran. As we're running short, I think I will just skip this and go to Q&A. But let me just illustrate that a lot of cross-functional and top management as well thinking behind this right across the safety of our people and our assets, security and compliance, brand neutrality and workplace discipline, supply chain, of course, asset protection, operational continuity framework. So we have a lot of work behind this. And similar to what we went through in terms of the Ukraine-Russia war back in February 2022, we really did a deep dive on supply chain. So that is, of course, supply chain assurance, but also inflation-related cost impact of that. So we have a lot of work on this. Roughly, sensitivity, and this is, again, very rough sensitivity on an annualized basis, if the war goes on another 12 months with barrel of oil going from, let's say, mid-70s to low 80s as a base price, it goes up by $10. What we're saying is the impact could be around PHP 400 million. Now again, this is 12 months of this occurrence. So these numbers are probably much larger than what we'll see happen. But again, I don't know what will happen. So we are planning for this as a worst-case scenario. And then here, our sensitivity, we dialed it up with I think this is roughly $30 to $40 per barrel increase. So, up here it's $40. Yes, it's $40. So again, we're not factoring these numbers in. But of course, we are very mindful of our ability to be able to continue business and not pass on everything to the consumers, but it is a very volatile and difficult time right now for all businesses. So this demonstrates that we're not sitting back and reacting, but we're proactively taking measures to ready up. So key takeaways: one, resilient revenue driven by superior tasting food, affordability and, of course, value-driven demand. So I think I mentioned several times our trade-off between taking price to really making sure our food is affordable without cutting on the quality and that's delivering growth. So we can see that through traffic-led to system-wide sales growth. You can see that in domestic and international growth rates. We can also see that in terms of how we are thinking about pushing forward on investments on digital and channels. And then finally here, meaningful improvements in earnings quality, which is equally important to the top line growth, of course. And that's about leverage. That's about operational excellence. And so operating income growth is outpacing revenue growth of 9.3%. Earlier, I showed the summary of the P&L, and we'll continue to have that discipline. And of course, we'll continue to support and be very disciplined in scaling our high-return platforms such as Compose Coffee, both in Korea and transporting it outside of Korea; Tim Ho wan, both in Hong Kong and outside of Hong Kong, led by the U.S.; and of course, Highlands Coffee through its IPO and continued growth capital raise. Capital-light expansion will continue as we've shown you before. We'll continue to open more franchise stores than company-owned stores. Earnings led growth with balance sheet discipline. So EBITDA growth of 14%, outpacing the debt growth of 11%. Cash also we're rather conservative on this end. I think it's good to be for many reasons, but we want that financial flexibility, but cash grew by 19% versus debt. Accelerated payback in our CapEx investments, and that it was slightly longer than I had hoped for, but yes, we can stay on to take questions because I wanted to make sure that we got into some of the details of the very important Q4. So thank you, Gio, and I'll pass the floor back to you.

Okay. Thanks, Richard. You all know the drill. [Operator Instructions] Richard, I hope you don't mind. I'll start off with a couple of questions on my own before we take questions from the audience in general. My question really is, first question is on Smashburger. I'm wondering what's going on there? What is the outlook or what can we expect for 2026? The second question is, in the past, you have mentioned that there is a longer -- medium-term target, I should say, for profit to reach PHP 24 billion. I am wondering what happens now given the announcements about the spin-off? And is there any revision or any new number that you have in that?

Thank you, Gio. So 2 separate questions. So Smash I've consistently said it's about converting our network. So just to give you some data points, we started the year at 214 locations. And I think some of you had raised a question around why the slight dip in the same-store sales number, and that's because we're now at 192. So we are starting to close the stores that need to be closed, and we're going to scale the stores in channels like nontraditional. So I know it's Q1 data, so I won't mention it, but we do see openings, both franchise traditional and also through nontraditional. So we're going to bring down our company-owned stores. We're going to convert, and we're going to scale back up through franchise and nontraditional channel as well as traditional. So that's the plan for Smash and I'm very excited about this journey because I think our plan is very clear. Our skills and leadership on the ground is very strong, and we will onboard a few more key positions as well that's really going to help us accomplish this. So that is on smash, on track. And then for the tripling in 5, what does it mean with spin and the rest of it? We are now starting Year 3 of Year 5 to the tripling in 5-year statement that we've made. There has been some macro headwinds, both in domestic, starting with corruption and all those other sort of macro headwinds that we saw earlier in Q1 and Q2 of the year as well as other stuff that we've discussed today. But we're absolutely committed to creating shareholder value. So whether it's done as one vehicle or whether it's done as 2 separate vehicles, the bottom line growth, not just valuation growth, but the bottom line growth, we're absolutely charging on to try to deliver that tripling in 5. And if it's not tripled in 5 and it's higher or slightly lower, it is what it will be, but the valuation, I believe, of the 2 businesses will most definitely be higher under the spin scenario.

Thanks, Richard. I'll take the first question from Chang Qi.

Just a bit more clarification for the coffee business. I noticed from the store count side, CBTL has an adjustment of 200 stores downwards, yes. Why is that?

Yes. Good observation, Chang. The 219 store adjustment is our recognition that we are pivoting in Korea with our franchisee. So we've taken those store counts out as we do our pivot in that market.

Sorry, when you say pivot means you take it back or the sales are considered gone?

The old franchisee will not be a franchisee going forward. So we've taken those stores out.

Okay. Okay. Then on the coffee business, maybe it's partly related to that. I understand your explanation on the EBITDA adjustments for both Compose and CBTL. But on a sales basis, it did decline Q-on-Q. Why is that?

Yes. Q-on-Q, John Te, it's not a cap out, but in a market like Korea, with 40% of our variant being Ice Americano, there is some weather-related seasonality. So we don't really look at it on quarter-to-quarter because they will have different levels of consumption. We look at it quarter versus the same quarter last year to see really with seasonality and whether our business is flat or growing. So that's part of it. And Korea is a big part of our coffee story.

How about CBTL? That's because of the Korea franchise?

Yes. So we've taken that out. And yes, so essentially, it's a new base now going forward.

We'll take our next question from Nadine Bautista.

I'm Nadine here from JPMorgan. A couple of questions. I'll take them one by one. So Richard, just a follow-up on the lower OpEx that we've seen in the fourth quarter. Can you share what are the specific GaEx items that contributed to the savings? And in terms of the adjustments in A&P accrual, was this started only in fourth quarter? And how should we think about the quarterly recognition in OpEx for 2026? Should we expect the same quarterly contribution similar to 2025?

Right. Okay. So the PHP 800 million savings that we saw, it was broken into roughly PHP 500 million and PHP 300 million. So $500 million is basically cost control on G&A. And one of the key drivers within that, Nadine, was we've taken a decision prior to Q4 that we would have headcount freeze in the corporate positions and that we will continue to fund the business or the business units, but really to try to do more with the existing team at the corporate level. We've also looked at things like consultancy fees, external reliance, et cetera. So that's a manifestation of cost controls coming through. In terms of the A&P component that goes into that PHP 800 million number, we finished the quarter at 2.5% as a percentage of revenue, whereas I think in the same quarter a year ago, we were just north of 3%. And so we did that because in the past, if you recall, we would be making these A&P adjustments in the fourth quarter as a catch-up to all the billings that we did not receive in Q1, 2 and 3. And so we changed the process internally, and we got better processes. So to answer your question going forward, I think 2.5% to, let's say, 2.7% is probably the right run rate for A&P as a percentage of revenue. If I missed anything, can you please repeat?

Yes. Thank you, Richard. So if we look at the first quarter to third quarter numbers in 2026, it should be at a like-for-like basis already?

Yes. I think a lot of the correction was happening through the year, Nadine. So I think going into next year, that 2.5% to 2.7% rate is probably the more -- is closer to the run rate that we'll see.

Next question on my end is on Jollibee Vietnam. So if you can give more color on the strong 33% SSSG. Is this traffic or AC driven? I mean, are there new initiatives this year that led to the strong SSSG for Vietnam?

Yes. So I'll start with the macro very quickly. So today, we're just south of 250 restaurants. At end of December, we're at 245. And I mentioned that because the store openings is quite rapid. And that's because the demand is there. And the demand is there because in Vietnam, Jollibee is a 100% local brand, if you will. So they don't see it as a foreign brand. They see it as a brand that they resonate with. A few, I think, good marketing initiatives that we did early on, for example, is we were very active in promoting the brand through our mascot, as an example. So we've identified the top universities, the most populous universities throughout the country, and we were doing a lot of work sort of from ground zero at the university student level. I think that now is translating into continued patronage coming through that. So that's one of the things that I always see the team present data on, and it's really working. The other thing I'll say is a few years back, when the brand wasn't as big and the ADS wasn't as strong to support higher rent areas, specifically in Ho Chi Minh and Hanoi, we were underpenetrated in those places compared to KFC and Lotteria. So we really started from the outside in, so Mekong, Delta, et cetera, where we started to grow the brand, start to grow our P&L, and that then was able to fund our ability to be more aggressive. And so what's now happening with this rapid growth is when you look at the high-traffic cities like Ho Chi Minh, where we are now building a lot more stores than we did in the past, our same-store sales as well as new store coming into system-wide sales data is really starting to momentum. And then the last thing, I think I mentioned earlier, but maybe I'll just articulate it a bit more directly. If we're in a trade area, in particular, on a busy street intersection corner and if there's a KFC across the street forward, that KFC is not there because they closed down, which has been happening quite frequently in the big cities of Ho Chi Minh and Hanoi, then we're able to capture those audience that either work-wise or school-wise or residential-wise, we're patronizing that KFC store. So we're picking up our competitor volume as well. But net-net, I have to say it comes down really to the preference of our product. It's got nothing to do with being better price or lower price or higher price. It really has to do with our marketing, our distribution or real estate locations and also our ability to continue to locally R&D. We have a commissary. It's 99% Vietnamese employee base. And what we're doing is we're really putting products out there that is meeting the pallet of the local tastes as well.

Last question on my end. Just a quick follow-up on China. When should we still expect store closures this year? And how much of the store openings have been in the Super Value format? And what's the target for 2026?

Great question. Towards Q4, we were starting to open majority of our stores under that new model. Yes, we should expect a continuation of conversion from the old store models. So we'll have more gross store openings in 2026 than we did in 2025, but we'll also have some store closures as we convert through that. What's very interesting and exciting for me is -- so we're about 50-50 in terms of company-owned and franchise. But as we start to tip the scale, what we're going to start to see is we're going to start to see essentially higher OPMs and drop-through of royalties going straight down as the bottom line. So it will take a bit of time for that transition. But yes, so net, our store count will grow, but it won't grow at the speed of our growth. So that is to say we'll continue this probably for another fiscal year. And then I think we're almost there.

Thanks. We'll take the next question from John Te.

Maybe 3, 4 questions for me. First is on Smashburger. Q3 was already negative 5% on same-store sales, and it jumped to about negative 10% in the fourth quarter. And I guess EBITDA was also the pace at which EBITDA was printed, I guess, only marginally improved. And I think that was very different from the slide that you presented earlier. So care to explain, I guess, the variance between the 2 set of data.

Okay. John, so I just pulled up the slide again. So in Q4 of last year, Smash, we had a loss of $400 million. And this year, we reported half of that loss at 200 million. On a full year basis, we had $1 million in 2025, which is to say Q4 is under-indexed versus the full year. And so yes, the losses are reducing for a few reasons, John. One, in 2025, in particular, sorry, in 2024, in particular, Q4, we were quite aggressive with our Uber Eats and DoorDash aggregator programs. And by aggressive, I mean to the extent that they were not making money, those programs. We've completely reversed that. So now as our aggregator channel increases, so we are seeing in Q1 positive RB on aggregator channel, but they're profitable aggregator sales now, no longer the overly discounted or promoted through BOGOs and other types of things. So yes, so that's what we're seeing in Smash in terms of lower losses, but also the channel mix where the losses were coming from are really changing as we've completely changed our aggregator program strategy.

Okay. That's clear. On CBTL, just to follow up on Chang Qi's point. I guess we were seeing mid-teens kind of growth on system-wide sales in the first 9 months, and I guess that fell to close to 0 in the fourth quarter. So I suspect that was mostly taking out that Korea franchisee. I guess the question is, perhaps you could walk us through the thought process of that decision and why didn't you continue the business? I guess it was quite significant or perhaps offer to refranchise, if not even convert it to Compose Coffee stores, et cetera?

Yes. So the situation in Korea at the moment, the details of it, unfortunately, I cannot get into because we're going through a process right now. that involves litigation. And so I won't get into the details. But I think the positive point to all this is we had a franchisee in Korea that was unproductive for us. And so by removing that, we get an opportunity to get back one of the most important coffee markets. And once that's settled, we would have the premium price point, which is still quite large, growing, of course, slower than the value segment, but we would have the premium and the value. So strategically, I think that will be a really good market for us when we go through that. But essentially, it was just time to, yes, part ways with that franchisee.

Okay. Third question, on the U.S. stores, I think you flashed in the slide earlier that you have about 75 in the pipeline. Just want to check how much of that 75 will be opened in 2026?

I know you're going to ask that question. We do have a low single-digit number for openings this year. But again, as I've always explained, contract sign, lease sign, construction, that lead time always takes about 18 months if everything goes well with permits and license. So that is to say the single digit this year will likely be a double digit next year and so forth, and we're signing more franchisees as well. The other thing that we are in the midst of doing, John, in the U.S., which is very encouraging, is we're taking proven operators, meaning that they have other restaurants, they have experience running other brands. And they're also interested in buying, for example, a store or 2 that is within that cluster that we are assigning to them. So that is to say we will also see an opportunity to sell our stores at profit, but then sign development contracts. So that opportunity didn't exist for us in the past, but now given the box economic strength that we're seeing potential franchisees asking for that model, which also helps close the deal with these franchisees. So yes, single digit this year and likely double digit next year onwards.

Okay. That's clear. Last question, and this is a maintenance question. We can take this offline if you don't have the data. But on Compose Coffee, I think we were doing a quarterly run rate on revenue, which you report of about PHP 4 billion, but the full year was closer to PHP 12 billion something. So there was a big drop in, I guess, what the implied 4Q number was in terms of revenue, not system-wide sales. So any comments? Was there an accounting change that...

Yes, definitely. And I'll provide the -- sorry, yes, 4PL to 3PL movement, but that was all accounting change. We used to recognize it under 4PL, but now we recognize the 3PL. So the revenue line changes, the gross margin line changes, but the net profit or EBIT line does not change. but we can provide that data.

Well, I think we have one -- sorry, but I think we have only time for one more person to ask questions. Let me take [ Kip ] for the last questions. We don't have too much time left, sorry. Kip, please ask your question.

So my first question is on the listing in the U.S. Can you share with us what are the coming milestones and also the time line for these milestones? And relating to operation, I mean, I wonder how the royalty going to -- take Jollibee brand, for example. Does that mean U.S. international company going to pay Jollibee Philippines for royalty going forward? That's my first question.

Okay. Thank you. So let me address that. So I think on Jan 7 or 8, right after this disclosure and announcement, I held some sessions. And with apologies, I said that there are certain things I cannot speak of because we're bound by the SEC regulations, U.S. laws. So I won't be able to give you the specifics of the milestones, but what I can say is at the appropriate time, we will be disclosing everything that's relevant to our investors in a public forum so that everybody sees it and hears it at the same time. So that's the first thing. But absolutely, it's a very, very important project for us, and we are fully invested in this. And a ton of work has been done and continues to be done according to the time lines that we've set internally. We did commit to a late 2027 listing. So we're keeping to that time line. In terms of the royalties and so on, it falls under the same category of things I cannot disclose, but I can share with you the principle. And the principle was that all the assets as well as operations of international will be listed. So what exists today may not be the same structure and set up as tomorrow.

Okay. And then my second question is that how likely you think that the listing is going to be? Or are you going to go ahead at the current form by end of the next year. And then either any plan B, for example, we are not just going to do, let's say, IPO of the coffee and tea business, right? And in another country like Singapore, which to me actually is much easier and cleaner and pitching something like coffee and tea business, which is pure play already profitable, very high growth is actually much easier, right? Is there any plan B, something like that?

There is plan A and then there's Plan A. And by that, I mean, we are committed to the platform listing of all the international assets bundled together. I think one of the perhaps limitations of the vertical listings that you're mentioning here, Kip, by categories or by subsidiaries is that the holding company, it's still a Philippines holding company. And so we have not changed the strategy. It will be a spin-off in terms of the holding company structure will change, and we'll have some common investors and some new investors. But yes, we are not changing or pivoting. Now the Highlands Coffee one was something that was in the pipeline for many, many years, and we do have a partner. And so we're sticking to that liquidity event. But other than that, we are not changing to a vertical listing.

And then my last question is on the most recent M&A, right? So if I'm not mistaken, it's 2% contribution to revenue, 8% contribution to EBIT. So 2 sub questions here. Number one, how sustainable is this EBIT? Were there any one-offs at the time of acquisitions? And second is that in your plan of growing EBIT this year 10% to 15%, does that already include this 8% additional from the M&A?

Yes. The interesting thing about a fixed price all you can eat model. So this is 100 minutes, roughly around USD 20 price is the key KPI there is turns. So for example, if you did only lunch, that's 1 turn in that restaurant. And then all of a sudden, you're able to do lunch and dinner, that means you -- from the same asset, you've increased your P&L by 100% because the price is fixed price. So what we're looking at, at the moment, to answer your question, is it sustainable? Absolutely. Is there an upside? Absolutely. Because the churn at the moment, we believe that it has room to improve and can go up. So that's what we're going to focus on. In terms of when we did the blended growth rate guidance, we always sort of look at our business in totality, not by necessarily add-ons per se. But the consolidation of this business has not taken place yet because we've announced it, but the actual completion of the deal will still be a month or 2 away from now.

So I guess that's all we have time for today. So we'll end this session. I'll leave Richard and Cossette to give some final words.

Okay. Thank you, Gio. I guess my final words is a big thanks to my team who spent days and hours preparing all this for me and with me. I thank our partners at Regis, as well, Gio. Thank you so much for hosting and Michael and to all those who've dialed in and to all the questions, and we'll continue to provide answers to the questions that we did not cover today. So thank you again, and stay safe, everyone, and have a great rest of the week.