The annual meeting of the stockholders of Jollibee Food Corporation is now called to order. In line with existing statutory requirements, as provided under the revised Corporation Code and the issuance of the Securities and Exchange Commission, the corporation is conducting its 2021 Virtual Annual Stockholders Meeting. To all our fellow JFC stockholders, thank you for participating in this year's meeting through the Voting in the Absentia system or voting via proxy and sending your questions to our Corporate Secretary's official email. Welcome everyone to this afternoon's live webcast. In accordance with the corporation's bylaws, as Chairman of the Board of Directors, I am presiding over this meeting.
Further, in the event of any Internet connection issues encountered during the proceedings, an officer of the corporation will continue the proceedings. Will the corporate secretary please certify that notices have been sent to the stockholders and that a quorum exists in the meeting to transact business.
Good afternoon. In my capacity as Corporate Secretary of Jollibee Foods Corporation, I hereby certify that in compliance with Securities and Exchange Commission requirements, authorities of this meeting has been published in 2 newspapers of General Circulation, Business World and Manila Times, both in print and online versions, last June 3 June 4, 2021. The notice of meeting and the information statement are made available to our stockholders and the public via disclosure through the PSG Edge system and posting in the Corporation's website. I certify that there are present in this meeting in person or by proxy stockholders representing 847,326,948 shares or 76.422 percent, which constitute more than majority of the total issued at outstanding shares. This meeting is therefore competent to transact business for which it was called.
Thank you, Mr. Tanyung Tiong, for certifying that there exists a quorum to proceed with today's meeting. Good afternoon, everyone. I am JJ Salgado, and I will be your host for this afternoon. We acknowledge the presence of the members of the Board of Directors, the members of the executive team, and other corporate officers who are with us today.
Finally, we acknowledge representatives from C SIP, Gores Velayo and Company, Marsh Philippines Inc, and our other insurance partners, Romulo Law, Picazo Law, various banks, equity research firms and stock brokerage houses, and members of the media. For good order in this afternoon's meeting, please allow me to give you a summary of the rules and procedures observed in our online registration and voting and abstention system. These rules and procedures form part of the Corporation's information statement as its Annex A, which has been made publicly available via the Corporation's statutory submissions and through the Corporation's website. Number 1, only stockholders of record as of record date May 28, 2021 shall be entitled to vote or be voted at this meeting via registration under the voting and absentia system or voting by proxy. Only those who have successfully registered through the online system or have submitted duly accomplished proxy forms as of June 15, 2021 shall participate in this meeting.
Number 2, stockholders were given until noon today to cast their votes on the matters included in the agenda. We have referred to the results of the tabulation for votes received as of June 15 as basis in proceeding with this afternoon's meeting. The final results shall be reflected in the minutes of the meeting. And number 3, stockholders were also invited to submit their questions through the email corporate secretaryjollabee.com.ph. Among the questions sent, we have selected the questions for this afternoon's program.
Thank you, Ms. Salgado. Let us now proceed to the agenda item on the approval of the minutes of the last annual meeting of the stockholders are held on July 24, 2020. An electronic copy of the draft minutes was posted and made available via the corporate website within the statutory period. May we have the corporate secretary provide the voting results on this agenda item?
For the foregoing agenda item mentioned by the chairman, stockholders owning more than majority of the total issued and outstanding shares gave their affirmative votes.
The next item in the agenda is the Management's Report. A copy of the President's message to our stockholders is included in the Annual Report that is posted in the Corporation's website. We have prepared a pre recorded speech from our President and Chief Executive Officer to be followed by an audio visual presentation.
Fellow shareholders, colleagues from the board and management, ladies and gentlemen, a jolly afternoon to you all. We were looking forward to a great year. Our businesses across all regions were performing strongly in January in sales and profit. Then the coronavirus pandemic struck. It has caused the largest economic downturn in decades and affected the lives of practically everyone in the world.
Our business in China was the first to be hit by the pandemic in late January. By mid March, our businesses in the Philippines, other parts of the world started to suffer the impact of the pandemic, resulting in temporary closure of 50% of JFC stores worldwide. At the end of the Q1 of 2020, as lockdowns were gradually lifted across all regions, we slowly reopened stores. By the end of the year 2020, 96% of the GFC's worldwide outlets were already operating. For the entire year, GFC sales dropped significantly.
It incurred losses in the 1st 3 quarters of the year. Despite the uncertainties, we stayed clearly focused on our mission to serve great tasting food, bringing the joy of eating to everyone. We strengthened our off premise channels in order to continue to serve our customers. We enhanced delivery, boosted takeout sales and introduced curbside pickup. We also improved the turnaround time of drive thru operations and launched new products suited for off premise consumption.
Our off premise channels became the driver of our business and contributed a greater percentage of total sales. We focus on rebuilding our business along with implementing major cost improvement under our business transformation program. We spent a total of Ps6,700,000,000 out of the total Ps7,000,000,000 provision. JFC generated savings from the program and about 2,600,000,000 pesos are expected to be realized annually in full in 2021 the years ahead. JFC's consolidated revenues decreased by 28% to MXN 129,300,000,000 primarily as a result of closure of stores and lower sales per store.
System wide sales, which measure sales to consumers, both from group owned and franchise stores, decreased by 27.8% to MXN176,000,000,000. Same store sales growth of the domestic business declined by 34.4% due to higher level of restrictions imposed in the Philippines, while foreign business same store sales declined by 12.4%. In general, same store sales recovered faster in developed countries than in developing countries due to higher purchasing power fueled by the stimulus package from their governments and unemployment pay from their social security system. JFC's consolidated net loss attributable to equity holders of the parent company amounted to 11,500,000,000 pesos, the largest loss and the only recorded annual loss in JFC's history. While JFC's loss for the year was quite significant, JFC was able to return to profitability in the Q4 after hitting its lowest point in the second quarter.
It generated a 2,000,000,000 pesos net income attributable to equity holders of the parent company. JFC started to generate positive EBITDA for earnings before interest, taxes, depreciation, and amortization as early as June 2020. In the Q4, EBITDA amounted to Ps. 7,100,000,000 compared to Ps. 1,400,000,000 in the 3rd quarter.
Through our wholly owned subsidiary, Jollibee Worldwide Private Limited or JWPL, Proceeds from these issuances, net of the payment for short term debt for the acquisition of CVTL remain mostly intact and invested in money market and fixed income funds. JFC recognized Ps1.3 billion gain JFC's total assets increased by 12.5 percent to Ps. 210,800,000,000 due to our US dollar denominated investments worth 35,700,000,000 pesos. GFC maintained a cash balance of 21,400,000,000 pesos, 2.2 percent higher than the cash balance at the end of 2019. Our balance sheet reflected JFC's capability to withstand the crisis and to invest for long term growth when and where opportunities arise.
In 2020, JFC spent 5,900,000,000 pesos in capital expenditures lower than the 14,200,000,000 pesos investment originally planned for the year. JFC became far more selective in its investment in 2020 to preserve cash as a precautionary measure in the business downturn. JFC opened 338 new stores in 2020. For the first time in JFC's history, more new stores were opened abroad than in the Philippines. JFC opened its first Tim Hoan restaurant in Mainland China, marking the Michelin Star restaurant's entry into the world's 2nd largest consumer economy.
JFC aims to build a significant business serving Chinese cuisine in different parts of the world. In October 2020, JFC through JWPL increased its participating interest in the title fund from 60% to 85%. Despite the crisis, Q1 of 2019. In May December 2020. Through JFC's social responsibility arm, the Jollibee Group Foundation, JFC provided assistance to communities around the world that have been affected by the pandemic and in communities where we operate.
GFC allocated an emergency response fund amounting to 1,000,000,000 pesos to help our employees an update on the current situation of our business. In the Q1 of 2021, JFC generated an operating income of 1,500,000,000 pesos representing a significant recovery from the operating loss of 1,200,000,000 pesos suffered in the same period a year ago. Net income attributable to equity holders of the parent company for the Q1 amounted to 152,600,000, significantly lower than JFC's operating income. This was mainly due to the interest expense and the impact of the corporate recovery and tax incentives for enterprises or CREATE Act in the Philippines. The value of deferred tax assets decreased by 629 point 4,000,000 pesos, which increased the provision for income tax for the Q1 of 2021.
The reduction in income tax rates will reduce income taxes on future brackets. System wide sales of JFC decreased by 13.4% to MXN 47,800,000,000 in the Q1 of 2021 compared to the same quarter last year. Revenues declined by 12%. Our profit and cash flows recovered strongly versus a year ago, reflecting the successful execution of our business transformation program. Practically, every cost item in our company decreased far more than our sales decline.
While we still face significant challenges in the Philippines, our domestic business provided the most profit contribution among our regions in the world. It grew operating profit by 23.7% in the Q1 of 2021 despite a 21.3% decline in sales. We look forward to a strong recovery of our Philippine business in the months ahead and even faster sales and profit growth of our businesses abroad. JFC opens 79 new stores and permanently closed 76 stores in the Q1. The year 2020 was extremely challenging for JFC as for most other businesses.
But I've always believed in our JFC families' resiliency and perseverance that have seen us through many obstacles before. JFC has emerged stronger from this crisis as we move forward to achieving our vision of becoming one of the top 5 restaurant companies in the world. To the JFC employees, thank you for your endurance against adversities, your hard work, and your commitment. I would also like to thank our business partners, our franchises, suppliers, landlords, and lessors who work with us in finding mutually viable solutions to address the challenges brought by the pandemic. Thank you to the JFC Board of Directors for your guidance and support.
And to you, our shareholders and customers, thank you for the trust you have placed on us.
In a year challenged by the pandemic, the Jollibee Group remained resilient and underwent a business transformation to meet the changing stronger from the pandemic. Jollibee remained steadfast In delivering joy. Amidst the pandemic, Jollibee food to consumers bringing 100% system wide sales growth and contributing to 12% of total sales. The new Jollibee app provided accessibility and convenience to customers getting 1,000,000 downloads within a month. Through its campaigns, Jollibee reinforced its best sellers as enablers of family bonding and reassured customers that safety is prioritized across all Jollibee services.
The brand's heart tugging Christmas ad, joy of family, from its acclaimed views. Jollibee North America quickly recovered and ended the year with double digit system wide sales growth and 16 new restaurants across the region. In the EMEA region, Jollibee saw exponential growth in its and Singapore. With its superior tasting products, it is seeing main Singapore and Europe. Greenwich Bakka does optimistic Pizza average daily sales growing 25% versus pre pandemic resulting in and in the Philippines became more accessible by offering call and pick up and park order and go services.
With an aggressive pivot to delivery, Greenidge grew its delivery network from 47% of stores before the pandemic to 87% and post an all time delivery sales record of over 1.5 1,000,000,000 pesos by end of 2020. By focusing on great tasting new products, and and off premise channel growth, Chowking maintained its position as the country's leading Chinese fast food brand. The brand improved existing products and expanded its delivery coverage to Internationally, Chowking achieved milestones with store openings in the East and its highest volume of shop house sales in the US where it also adapted to delivery platforms such as DoorDash. Despite a challenging year, profits among JFC brands worldwide in the second half of twenty twenty. Yonking's delivery service saw double digit growth for the 3rd straight year growing 25 percent and accounting for 50% of the brand system wide its
digital
transformation, even launching live webcasts, which garnered over 30,000,000 views and sales of over 1,000,000 renminbi. Despite the challenges brought about by the pandemic. Red Ribbon emerged stronger, opening 20 new stores and growing delivery by almost 700% versus pre pandemic. By the end of the year, Red Ribbon Philippines fully returned to its pre pandemic average daily sales level. Red Ribbon pandemic levels with its best sellers offering delivery via DoorDash to serve more customers at home.
Half a 1,000,000 with members consumption accounting for 60.7% of total sales. Delivery accounted for 60% of total store sales from 40% in 2019. My Inasal quickly adapted to new business realities brought by the pandemic, expanding its off premise channels and strengthening partnerships with Grab Food and Food Panda. Mang Inasal also enhanced its menu offering new products at proposition. To steam Burger King Philippines relevance in the new normal, the brand focused on pivot plants stronger momentum with the local launch of Angry Whopper and Plant Based Whopper to bring average daily sales back to pre pandemic levels.
Thanks to the aggressive growth of off premise channels, takeout, drive through, and delivery made up 79% of all sales. BK ended the year at the 11th spot in the branded eat Out category from its 17th place finish in 20 19. Highlands Coffee remains to be the leader of Vietnam's coffee retailing market. The key role in the largest and fastest growing coffee market across Southeast Asia. Faa24 achieved remarkable results in 2020.
Delivery rose from 0 to 25% of all transactions at the start of the lockdown stabilizing to our brand had a 64% network growth with the opening of 14 new stores. With a slew of great tasting new products launched in 2020, such as the smoked bacon brisket burger and the Colorado burger smashburgerachieve Thanks to a major smash e commerce platforms, the brand achieved a 436% increase in digital sales. CBTL opened 55 stores worldwide most notably in the US, Malaysia, Singapore, South Korea and the Philippines. CBTL USA expanded existing partnerships and re platformed its e commerce site contributing to a 108% sales increase from 2019. CBTL Singapore and Malaysia broadened their menu offerings and expanded 3rd party delivery platforms.
As the world grappled with a challenging year, the Jollibee Group not only weathered the storm, but also offered aid to communities that needed And despite the challenges of the pandemic, The company has emerged stronger as an the group remains steadfast in its mission of serving great tasting food. And bringing the joy of eating to everyone. And in its vision of becoming one of the top 5 restaurant companies in the world.
The next agenda item is the approval of the audited financial statements for the year ended December 31, 2020 and annual report. We have the corporate secretary provide the voting results on this agenda item.
For the foregoing agenda item mentioned by the chairman, stockholders owning more than majority of the total issued and outstanding shares get their affirmative votes.
The next item in the agenda is the ratification of the actions taken by the Board of Directors and officers of the corporation since the last Annual Stockholders' Meeting on July 24, 2020. May we have the corporate secretary provide the voting results on this agenda item?
For the foregoing agenda item mentioned by the chairman, stockholders owning more than majority of the total issued and outstanding shares get their affirmative votes.
The next item in the agenda is the approval of the amendments to Article 2 of the amended articles of incorporation to clarify and ensure for the avoidance of doubt that the Company and its subsidiaries in pursuit of its primary business purpose, can invest in, acquire, own, hold, use, sell, assign, transfer, lease, mortgage, exchange or otherwise dispose of real and personal properties of every kind and description or interest therein. May we have the Corporate Secretary provide the voting results on this agenda item?
For the foregoing agenda item mentioned by the Chairman, stockholders owning more than 2 third of the total issued and outstanding shares give their affirmative votes.
The next item in the agenda is the approval of the amendments to Article 7 of the Amended Articles of Incorporation to reclassify and divide the authorized capital stock of the corporation into 1,430,000,000 common shares with a par value of 1 peso per share and 20,000,000 cumulative non voting, non participating and non convertible perpetual preferred shares with a par value of 1 peso per share. May we have the corporate secretary provide the voting results on this agenda item?
For the foregoing agenda item mentioned by the Chairman, stockholders owning more than 2 thirds of the total issued and outstanding shares get their affirmative votes.
The next item in the agenda is the approval of the shelf registration and listing of 20,000,000 preferred shares and initial offer and issuance of up to 12,000,000 preferred shares. May we request our Corporate Secretary to provide a brief background on the matter and to also provide the voting results on this agenda item.
In connection with the shelf registration and listing of preferred shares on 11 May 2021, the Board of Directors approved the following matters among others: 1, application for the shelf registration and listing of 20,000,000 cumulative non voting, non participating, and non convertible perpetual preferred shares at an offer price of up to Ps1,000 per share or the offer shares, to be issued within a period of 3 years 2, initial offer and issuance of up to 12,000,000 preferred shares 3, filing with the Securities and Exchange Commission of the appropriate registration statement and prospectus for the offer shares 4, filing with the Philippine Stock Exchange of the listing application for the offer shares and 5, engagement of the services of underwriters, advisers, legal counsels, stock and transfer agent, receiving agent or bank, and other agents as may be necessary, proper or desirable to effect the offer and issuance of the overshares. The issuance of the preferred share is part of JFC's plan to restructure its financial obligations in order to strengthen its balance sheet, spread the maturity of its financial obligations, and reduce its foreign exchange risk. This is also part of the action steps to reduce its debt and financing costs as its business in different parts of the world recover from the severe impact of the pandemic.
For the agenda item on the approval of the shelf registration and listing of 20,000,000 preferred shares and initial offer in issuance of up to 12,000,000 preferred shares, stockholders owning more than 2 thirds of the total issued and outstanding shares gave their affirmative votes.
The next item in the agenda is the election of the members of the Board of Directors.
Mr. Chairman, following our bylaws, the nominees included in the final list of candidates submitted to me by the nomination committee are Tony Tan Kaktong, William Tan Untiong, Ernesto Tan Maniong, Antonio Chua Poi Eng, Ang Cho Sitt, with our Chief Justice Artemio V. Panganiban, Cesar V. Purissima as Independent Director, Kevin Goh as Independent Director, and Yirong Chong as Independent Director. In compliance with statutory requirements, the information of the nominees is included in the corporation's information statement.
Considering that the Board has 9 seats and only 9 candidates have been nominated, the Secretary is hereby ordered to cast all votes in favor of all those nominated. Thus, the following are elected as members of the Board of Directors, Tony Tan Kaktiong, William Tan Untiong, Ernesto Tan Maniong, Antonio Chua Puiying, Ang Chowsit, retired Chief Justice Artemio D. Panjaneiban, Cesar V. Purissima as Independent Director, Kevin Goh as Independent Director, Yi Rong Chong as Independent Director. Congratulations to the newly elected members of the Board of Directors.
The organizational meeting of the newly elected directors shall be held immediately after this meeting. We shall proceed to the next item in the agenda, the appointment of external auditors for the fiscal year ending 2021. We wish to inform everyone that the audited financial statements for the fiscal year ending December 31, 2020 was prepared by the Corporation and reviewed by the auditing firm of CECP, Gores Belayo and Company. May we have the corporate secretary provide the voting results on this agenda item?
For the foregoing agenda item mentioned by the chairman, stockholders owning more than majority of the total issued and outstanding shares give their affirmative votes.
Thank you, mister Tanwant Yong. Prior to the meeting, our stockholders sent their questions and feedback to the corporate secretary at jollabee.com.ph email address. Among the questions sent, we have selected the questions for this afternoon's program. For our question number 1, how was the business performance of CBTL and Smashburger? We request our President and Chief Executive Officer, Mr.
Ernesto Tanmanthiong to answer the question.
Thank you for that, Christian. Coffee Bean and Tea Leaf had shown remarkable profit improvement in the past several months. This was in spite of the pandemic. When we acquired CVTL in September 2019, it was generating significant losses. As a Q4 of last year and the Q1 of this year, I'm happy to mention that CVTL's losses were significantly down.
It even generated a small amount of operating profit in the last 2 months of the Q1 of this year. This was one of the reasons why JFC's operating profit turned around from a loss in Q1 2020 to a profit in Q1 this year. We were able to achieve this turnaround in profit by significantly reducing the general and administrative expenses, particularly in the United States. This reduction was according to the plan formulated when we were in the process of acquiring CVTL in 2019. The other main driver of the profit turnaround was the closure of non profitable stores, mostly in the United States, which we implemented as part of our business transformation program.
Further, CBTL's business in Asia have recovered strongly from the pandemic, particularly Singapore and Malaysia, where CBTL has company owned stores. CVTL's business outside the US was profitable before the acquisition and had recovered its profitability from the pandemic. The focus the focus of Coffee Bean and Tea Leaf going forward is profitable growth through new store expansion and increase in sales of existing stores through better branding and marketing. In 2021, CBTL aims to increase its store network from 10.70 as of the end of last year to 1100 stores by the end of this year. Most of the new store opening will take place in Singapore and Malaysia.
Next year, CBTL will focus on growing faster through franchising of new stores in the United States and outside the U. S. We expect CBTL to become a more important profit contributor to JFC in the years ahead. On Smash Burger, we also achieved significant business improvement with significantly higher sales and lower operating losses. Same store sales growth for the month of March 2021 for company owned stores in the US was up by 58.7% versus previous year and was up by 62% for traditional franchise stores versus year ago.
Its Q1 operating loss became just a third of the operating loss for the same quarter last year. Smasburgers new stores opened in 2020 2021 are generating sales to 2 to 3 times the average of other stores. It plans to open 25 new stores and renovate a substantial number of older stores in 2021. Smasberger's financial performance is expected to continue improving markedly in the months ahead towards profitability.
Thank you, Mr. Tanman Tiong. For our question number 2, how will minority shareholders benefit from the amendment to the articles of incorporation and approval of shelf registration and listing of preferred shares? We request our Chief Financial Officer, Mr. Ismael Baisa to answer the question.
The amendment to the articles of incorporation will help drive our business growth for years to come. This will benefit both the majority and minority shareholders of JFC. On the amendments pertaining to the issuance of preferred shares, the issuance of preferred shares is part of our plan to make our balance sheet even stronger. As mentioned in the information and disclosure to the Securities and Exchange Commission, we will use most of the proceeds to buy back some of the U. S.
Dollar perpetual bond which we issued in January last year. Part of this plan is that we will also pay some of our loans by using some of our financial investments. Once we executed this plan, we expect that by December of this year, JFC will enjoy the following. 1st, we will have less debt with banks, less US dollar perpetual bond, and less interest expenses. Number 2, the maturities or when our remaining debts will become due for payment will be spread more evenly in the next few years.
Therefore, less financial pressure to JFC. Number 3, we will have less foreign exchange risk as we will have less financial obligations in US dollars. And number 4, JFC's credit standing will become even higher since we will have even stronger capability to pay all our financial obligations and this will be indicated by better financial ratios. This means also that should we need to borrow money in the future, our interest rate will be less because our credit standing will be stronger. Meanwhile, we will have more capability to finance our expansion while capital expenditures for new stores and manufacturing facilities.
This will mean we will sustain our profitable growth in the years ahead. I also would like to emphasize that the issuance of preferred shares will not affect our cash dividend policy on our common shares. JFC will continue to be able to declare cash dividends equivalent to 33% of net income attributable to its equity holders. So as you can see, these amendments are all beneficial to the business. These benefits will eventually go to the shareholders, both majority and minority shareholders in terms of higher earnings per share, higher cash dividends per share and higher stock prices.
Thank you, Mr. Baisa. For question number 3, what are your store expansion plans for 2021? What is your capex budget and will you be using your idle cash to fund this? We request our President and Chief Executive Officer, mister Ernesto Tanman Chong to answer the question.
We are opening about 450 stores in 2021. Our capital expenditure budget for 2021 is 12,200,000,000 pesos, the highest in our history. This will be funded by internally generated funds and our financial investments, which came from the proceeds from our bonds issuance last year. The international business will drive our sales and profit growth with our continued expansion in China, Vietnam and North America, led by Smasburger and our Philippine brands. We are also expecting the coffee bean and tea leaf and Highlands coffee to contribute significant to this growth.
With the positive outlook for China and USA, given the earlier recovery from the pandemic, yet with the Philippines recovery underway as restrictions are lifted and vaccinations roll up. We will accelerate our new store expansion in the months ahead. In 2022, as the world returns to normalcy, we expect to open at least 500 stores similar to how we were doing prior to the pandemic and most likely even higher than 500 in the succeeding years. More importantly, our businesses outside the Philippines now contribute 40% to our global system wide sales. We expect that in about 3 years time, our business abroad will contribute at least 50% to our sales.
Thus, we will reach our goal of fifty-fifty business split of Philippines and International by that time.
Thank you, mister Tanman Tiong. For our question number 4, how many employees volunteered to be given the COVID nineteen vaccines? We request our Chairman of the Board, Mr. Tony Tan Kang Kyung to answer the question.
Many of our employees have already been vaccinated through their respective local governments. And for those who have yet to be vaccinated, the Jollibee Group has prepared to provide free vaccinations for our people and likewise assist in providing access for their dependence at cost. We expect that close to 90% of our employees will be vaccinated. So, we at the Jollibee Group are 1 with our country's efforts in addressing the pandemic. With vaccination rates in the country increasing, we are encouraged and are confident that the Philippine economy's recovery can be well underway within 2021.
And we'll be geared towards becoming even stronger in 2022.
Thank you, Mr. Tan Kaptiong. And that concludes our question and answer portion for this year's Annual Stockholders' Meeting. We request our Chairman of the Board to proceed with the last item in our agenda.
There being no other matters in the agenda, I hereby adjourn this meeting. Thank you for everyone's participation and stay safe.