Everyone, welcome to the special briefing, investor briefing, investor analyst briefing for Jollibee Foods and the company's recent acquisition of South Korean coffee chain, Compose Coffee. Joining us this afternoon to give us more detail on the acquisition is the company CFO, Mr. Richard Shin, as well as the IR team, Cossette and Mona. So without further ado, I'll pass on to Richard for a few prepared remarks before we move on to Q&A. Go ahead, Richard. Thank you very much, Carissa, and once again, thank you, Regis Partners, for putting this together. Let me start by sharing my screen. Okay, let's put into slide mode. So we have a few slides, including some common questions that we've been receiving, and we thought it'd be helpful and useful to start with that, and then continue on with live Q&A thereafter. So before we get to that, again, this is the business that we acquired. It's Compose Coffee. More specifically, there are two entities, and they have slightly different roles, but combined, called- collectively called Compose Coffee. It's actually Compose Coffee Company Limited, which has all the franchise agreements with its 2,600+ franchises. It's a 100% franchise model in Korea, and so we're just talking about one market here. JMCF, which is the other entity, which has the process, the equipment, the capability to really procure the highest quality coffee beans, blend it, roast it, and also participate in distribution to get the final product out to its franchisees. As you can see here, we announced on July 2nd that we've acquired majority shareholding of effectively 70% of this business. The remaining shareholdings were purchased by two other entities. One is Titan Dining Investment, so they'll have a 5% stake, and a local private equity in Korea called Elevation Equity Partners, and they'll participate with 25% ownership. Elevation, for those who are not familiar, is a private equity firm focusing on mid-market buyers and growth capital opportunities in the consumer space in Korea and the rest of Asia, but mainly in Korea. Its founding members have over 30 years' experience investing in Asia and Korea, and mainly in the consumer sector. So Elevation's most recent exit, involving one of Korea's largest F&B franchise company, was, till now, Korea's largest and most successful F&B franchise exit. Compose Coffee ranks first in this industry for having the fastest or highest growth rate in the number of franchise stores over the past five years. As well, it was voted number one as Korea's favorite coffee, local coffee brand. It's 2,470 stores, as of February, was fully supported by Korea's largest in-house coffee roasting plant down in Busan, which is where the business started. And this also allows... Later, I'll get into more details on some of the competitive advantage of being able to sell highest quality beans at the lowest cost. Compose Coffee is on track to be the largest and fastest growing and leading value coffee player in South Korea, with V, BTS as its most current brand ambassador. The total consideration for the acquisition is approximately KRW 470 billion, and the split of that really is KRW 70 billion cash sitting on its balance sheet. And it is debt-free, so there's no debt on the balance sheet of this acquiring entity, acquired entity, sorry. And its trailing multiple is 8x, based on 2023 EBITDA. Further, Compose Coffee has a debt-free balance sheet, superior cash returns, and excellent profitability margins, as evidenced by its high double-digit EBITDA and EBIT margins due to its capital-light 100% franchise business model. So the EBITDA is actually very close to EBIT, given that the only CapEx that's being amortized is really the equipment and the manufacturing plant of the roastery. With JFC as a major shareholder, Compose Coffee financials will be consolidated into JFC group books upon closing, and we estimate that this will be around a 2% revenue uplift, 1/3 or 34% store counts, taking JFC to about 10,000+ stores after the transaction is closed, and of course, a very positive gearing of 12% to EBIT. This acquisition is in line with our commitment to coffee and tea segment, so it is a strategic segment that we've been investing in and growing. Of course, franchising has been something we talked about quite often for all of our brands, so that we can expand with speed at a capital-light mode. So, this fits right into that. It's also allowing us to really unlock a very fast-growing international value coffee market segment in South Korea, and where we currently do not have a value coffee business. And, Korea ranks third globally in terms of coffee consumption per capita, and I'll show you a chart a little bit later to put some context to that statement. JFC's resources and expertise in F&B brand development, combined with Elevation's local entrepreneurial mindset and local market expertise in the value coffee segment, will provide synergy in securing a sustainable future for Compose Coffee. So the point over here is we'll be very focused on that market, Korea, for the next five years, because there's plenty of growth to be had. Okay, now let me move to a fact sheet. So I know there's a lot of information here, but I just wanted to share with you. Once again, number one, value for money coffee, ranked by the number of franchisees over the past five years. Business started October 2014, so it's about 10 years of historical record. In 2023, the manufacturing plant roasted beans to the tune of 3,250 metric tons. The employee base is 111, so it's still a relatively small employee base. And the reason for that is because it's a 100% franchise model. 70 people out of the 111, just roughly 70 people, are devoted to, managing the franchisees and being very close to where our customers as well as our consumers are, with a very, outsourced model in terms of all the back-end supportive functions. Earlier, I mentioned, 247, though, but as at June, so the most recent data, they've grown it to 2,612 stores. So this is to say, we're on a pace of roughly between 30-40 new franchise stores per month, and we've been seeing that trend, for now the last, 12-18 months. Again, the big number here is the KRW 58 billion EBITDA margin, that, this company produced. And again, because there's no debt on the balance sheet, pretty much it's all available for working capital. Very little reinvestment, because the manufacturing plant is fairly new and has excess capacity for quite a bit of time, and of course, because there's no investment in store networks. So, a lot of this could be potential dividend upstream flow to its shareholders. Some numbers on the right-hand side, the EBITDA margin rate, as audited by PwC and confirmed in 2023, was 42%. Let's move to now the product. So, these are some of their best sellers, and here I point out Iced Americano is clearly their number one bestseller, with around 31% value contribution and around 40% volume contribution. And I'll show you, a snapshot of the menu later, just to put into context of some of the other products, which are more smoothie and, fruit-based, and of course, local heroes like the red bean, smoothie. So you can see. Sorry, it's all in Korean, but KRW 1,500 is the price of one Iced Americano. And you can see those that have milk or, you know, additional, ingredients to it, they range from, you know, all the way from the latte here of KRW 2,900, all the way up to KRW 4,200. So, the menu, is quite wide in terms of unit, price per cup. But again, we see this as an opportunity really, because at the moment, the, the menu is quite, geared towards Americano. So, certainly there's upside in same store sales growth through menu architecture opportunities. This is what a shop looks like at 8:00 A.M. in the morning. This is important because there are three peak hours in Korea for value coffee segment, and that's in the morning before work starts. That's right after lunch, so let's call that 1:00 P.M. And that's also around 4:00 P.M., when people usually come down for a break. And you can see Mega Coffee, which by footprint is the largest. And then you have another player here, Coffee X, which is also very much in line, similar to our Compose Coffee place. You will also note that it's very small, so your average typical Compose store will be about 330 sq ft. And so that allows franchisees to get a very quick payback of usually about a year or slightly less, because the CapEx to that is quite light. And you can see most of them are order-grabbing goes versus sit down, with distribution, sorry, delivery being about 8% of the distribution mix. This is what a store looks like without customers, so you get a cleaner view. And again, it's not a very high CapEx model, but certainly the right equipment from Italy and all the proper coffee or cafe equipment is present when we set up the franchisees. So I'll start with some Q&As that we've received, and then again, open it up to live Q&A. So first question, and the most common question is: You already have coffee. Why another coffee? We don't look at it that way. We look at it, coffee and tea, as a segment, a portfolio, and certainly CBTL, which is priced up, closer to the Starbucks, or premium segment, is very different from a value segment. So for example, one cup of Americano at Starbucks will be KRW 4,501, compared to the KRW 1,501 of, Compose that I mentioned. Highlands Coffee is a very different bean. It's Robusta. It's Vietnamese Robusta beans, and it's really a specialty coffee from our perspective, and resides predominantly in Vietnam, with some international market expansion opportunities. But really, it's capturing that market segment in, Vietnam, which is also a large and lucrative market. Milksha is actually a specialty tea, based off of, dairy, fruits, fruit base, and of course, the various tea base. So it's a specialty tea, so it's actually not complementary to Compose, but in fact fills a different consumer need. And Common Man Coffee Roasters, it's less than 10 locations, mainly in Singapore, and equally famous for its food as well. So again, very different brands in different positions in our coffee and tea portfolio. I just wanted to at this point talk about the golden rules of investments, because I think one of the questions on everyone's mind is: Is this a good acquisition? When will JFC stop doing acquisitions, and are we losing focus? So all related questions such as that, I will take on head on today, and we'll talk through those. But first and foremost, we're very now structured in the way we look at acquisition opportunities. So first, strategic fit within one of the four pillars of chicken, coffee and tea, Chinese cuisine, or better burger, and has to be value accretive. The, the accretiveness, if you will, has to come in two forms. So here you see cash returns measured by incremental EBITDA margin, so actual dollars and rates. And I just put some contrasting rates of 42% margin rate for this opportunity versus our blended rate currently at 13%, which we plan to increase organically as well. The second way it should be accretive is through value, so that's multiple to the group. We are purchasing this at 8x trailing, and by the time the 2024 books close, it's probably gonna be sub 7x, so I'll call it 6.7x-ish range, multiple on a forward if we're to look at it from today, versus the JFC currently, around 12x, EBITDA multiple. The last point here, to me is actually an incredibly important point, lessons from the past. Some of the acquisitions we've done and the lessons we learned from Smashburger, for example, is that the resources in place, local talent, local capability to really drive winning performance, is absolutely critical, as important as the financials when we take a look at businesses. Earlier, I mentioned to you, they're the fastest growing in the past five years, in the fastest growing segment. So if you were to go back to 2013, the value segment was almost 0% market share and was predominantly shared, 3/4 in premium and 1/4 in what we call the mid-price. Today, when you flash forward to, I don't have the latest, latest data, but, end of 2022 data, suggests that now the value segment has grown to 28%, and Compose Coffee is in that segment, along with Mega Coffee and a few of the other brands. And the mid segment has come down to 12%, and the, premium segment has come down into the 60s. But nonetheless, within that, you see a clear winner with us, Starbucks, picking up market share. So, it's, it's actually in total, 5%-10% per annum growth industry. But within that, we're starting to see really the divergence of two main segments, the Premium, which is where CBTL will continue to play, and Compose, where the fastest growing value segment, it sits in. Why invest in Korea? Again, after Italy, by far number one here, Canada is the second highest per capita coffee consumption market. South Korea here, is third. And then you can see within Asia, there's only Singapore and Japan, but, you know, quite a bit out. So it's a market that we don't really have presence, and definitely not in, in the value segment, which, as it turns out, is very capital-light and very profitable. How significant is this acquisition to JFC's business? Let me start with the bottom here. On a consolidated base, if we were to annualize 2024, and let me just explain by saying on July 2, we announced the signing of the Sales and Purchase Agreement. We're in the process now of seeking approval from the Fair Trade Commission, which we're very confident that we'll receive. They say it's about a 40-day process, so we'll keep everyone posted to that. But on an annual basis, it will be a 2% revenue uplift and twelve percent great gearing here, 12% bottom line uplift. And the way we're seeing growth rates go at the moment, 2025 we believe will be even significantly higher. 100% capital light, so it doesn't impact our balance sheet in a negative way. And again, our EBITDA margin plus cash that we'll be collecting through the dividends will be very much appreciated. It's debt-free, so therefore, again, the cash sitting there, it gives us many options. How is JFC financing this purchase? The 70% shareholding that JFC is effectively purchasing will be 47% debt, and the lines are lined up and secured. And of course, we have excess cash, as we do have a very healthy balance sheet, so 53% will come from cash. And this debt repayment will be strictly from the dividends coming in from Compose. So we believe there'll be a pretty quick payback period to this investment. The other questions that we've been getting is around loss of focus, et cetera. I think the key point here is we have a very capable, strong, local team that's staying in the business, including the CEO. We're also putting in there some significantly important key roles. So between Elevation and JFC, we've already identified some key positions and key talent with relevant experience in the market, and they'll be joining us as soon as we close the deal. And of course, Elevation being our partner, and they'll be 24/7, based in Korea, working with us on this investment. If I'm a franchisee, how much investment do I need, and why Compose, and why not some of the other opportunities in the coffee segment? So the barrier to entry is actually quite low. So store CapEx, it's around KRW 90 million. So that's the typical store format, which I mentioned, the 330 sq ft format. In U.S. dollars, it's around $65,000. Again, payback is very quick. In Korea, in the value segment, royalty is not based off of SWS, but rather, it's just a nominal monthly, so it's KRW 200,000 per month per store. So the majority of the P&L that I just showed you is really coming from the sale of the blended roasted coffee beans, which is proprietary to us and to our franchisees. There's also a small initial sign-up fee for the franchisee. So again, gives opportunities for capital-light investment for our franchisees. What do you think are the main competitive advantages of Compose? First advantage, I would say, is we're one of the few with a full-blown roasting plant, so there's volume here. Earlier, I mentioned... I may have mentioned the five... No, I didn't mention yet. So there's volume of 9,000 metric ton. Roughly, it's around 5,000 metric ton per shift. And the reason it's 9,000 metric ton, this assumes we can go up to two shifts very easily with, you know, changeover time. And this is 100% owned, and it's part of the acquisition on its balance sheet. And again, the equipment is fairly new, so I think it's about a year and a half old, and they're all top-notch equipment. Within the 111 people I mentioned, 70 is in the sales force. In this plant, there's only seven employees, 'cause everything is automated, including the blend or blending, and of course, that's all proprietary assets that we're purchasing when we buy this business as well. So that's one. Now let me put that into context. So, I know it's a busy slide, but let me walk you through. Top line is industry average. The middle line here is the top competitor, which is Mega Coffee, and here in yellow is Compose. So when you look at importation or how they import, the industry uses an importer, which of course will charge a fee to import, so does Mega. We co-procure with a third party. Second point in the process of how we get to the best price for the highest coffee beans, there is usually a wholesaler in between before it gets to the roasting, before it goes to another wholesaler, who then goes to another retailer, then to the cafe. Mega has a few steps cut out, so they go from importation or importing to third-party roasting. Again, third party, we're the only ones that roast, to a third-party logistics distributor to the franchisee. For us, we buy imported green beans through this co-procurement process. And if I can just bring you down here, the highest quality beans, because we do pay more, because they're better beans than compared to Mega. So you can see KRW 9,000 here versus KRW 7,500. We do import from three markets, so that's Ethiopia, Brazil and Colombia. Then we go through the roasting, which again, it's in-house costs, and we get it to the market substantially lower, so KRW 90,500 to the market, versus on average, KRW 30,000 ish. And for Mega, you can see they're KRW 20,000. So again, highest quality beans, as seen by the green bean cost here, at the lowest price to the franchisee. So this is one of our competitive advantage. And then the last piece here is, again, we outsource quite a bit, including logistics, so we've gone to 4PL, not 3PL, which is to say that... And I don't want to get into the details of that contract and agreement, 'cause it's still confidential, but it allows us to get our beans to customers at the lowest distribution cost. What's the rationale of the selling shareholder, and why did they sell at this only 8x multiple given their growth margins? First and foremost, Chairman Yang, who is the owner of this business, he started in the coffee trade many, many years ago, actually, on the bean side, so he's a coffee guy. Very humble beginnings, you know, working in the warehouse and sort of building himself up. Did very well with this brand and this business, but would really like to take the opportunity to cash out and go into a different space in coffee, which is the super premium space. So less volume, but more expressions of what a super premium coffee could be for Korea. So, that's his ambition. He had set a fixed price of KRW 400 billion back in 2022, based on roughly 10x multiple on 2022's financials, which, you know, brings it, I would say, more in line or mid-range of the coffee multiple in Korea. Having said that, the process itself was very interesting. It was given an exclusivity to the sell side, so Firm KR got the mandate, and the buy side, who is now our partner, the 25% partner, Elevation. And because of that, we then go through a long, drawn-out, bidding or price negotiation process. So by the time 2023 numbers landed, and we're now, you know, in mid-2024, the trailing as well as the forward multiples looked very incredibly advantageous. And the reason for that, again, is because of this process that we went through. Okay. So, as promised, I will stop there and take on any live questions. Okay. Thanks, Richard, for that presentation. So we'll open up the floor to Q&A. We already have some questions on the chat and also on email, so perhaps I'll go through them. And for those on the call, you may also raise your hand if you would like to ask your question live. So you mentioned earlier, Richard, that there is a there is... you plan to be involved, you shared how you plan to be involved in management of Compose, but you will be keeping the CEO and other key talent. That being said, how does the additional oversight of Compose affect, you know, the turnaround targets for your other brands, like Smashburger or CBTL, if at all? Yeah. Great question. Thank you, Nadine, for the question. So, thank you for recognizing that there's an operating team, and there's, of course, as a listed company, we have our fiduciary duties around governance and oversight. So it'll be a very small board. I think this was disclosed, I think I can mention it. It's gonna be a board of three members, so two from JFC and one from Elevation. And we're gonna apply our governance rules, and this applies to all of our businesses. So from a governance point of view, the mechanics are there. You know, not to get into all the details, but things like approval matrix limits, et cetera, et cetera, how we run our boards, how we run our strategy sessions, and so forth. So we will provide guidance. This will not distract or detract any resource from JFC senior team to our other two investments that we made, which is Smashburger and CBTL. Smashburger and CBTL already has teams as well as governance structure. As Group CFO, of course, I'm on the board of CBTL. I'm also very close with Denise Nelsen and team in Smashburger. And on this one, I'll also be part of the board. So, that's how we're gonna run it. It's not a sort of, I give more time to this and less time to that, but we found a way where effectively, we're now understanding that, on the ground team has to really outperform competitors. So, yeah, we're happy with that, and we're very confident our structure will work. Okay. Thanks, Richard. Just on the background of the transaction, there's a question here on: How did Jollibee, you know, come to know about about Compose Coffee? Okay. It's interesting. I get this question quite a lot. The truth of the matter is Gordon Cho, who is the founding partner of Elevation, he actually reached out to our head of M&A, Don Lim, back in December, and that led to a call with Gordon, the chairman, Chairman Tony Tan, myself, and Don. And after we looked at the numbers and had a conversation with Gordon, we also kind of thought: Huh, this seems a little odd because everything seems very positive. So we actually went down and spent three days in Korea. So went to the plant, we went to the shops, we met the team, and so forth. So yeah, the deal came to us, and I think, if Gordon was on this call, if we were to ask: Why us? He would say, "Well, Jollibee is probably one of the few out there who actually has multiple brands in different segments," so chicken and coffee, to be specific. And Gordon and Elevation's last, the one I alluded to earlier about the 10x, and still the biggest deal in Korea, most successful deal in Korea, was actually a Korean fried chicken business that they had taken, built for a number of years, and then they exited very favorably. So I think if you put all that kind of together, our reputation in the market is, we're more than a single brand business, but we're also one that actually builds businesses and stays quite long-term with our partners. So, we're fortunate. We have a good reputation, and the chemistry clicked, and the numbers made sense, and yeah, so the deal went quite smoothly in that sense. Okay, thanks, Richard. There's a couple of questions here, I guess, more on, you know, expectations moving forward. So, I guess, we can start with this one on, you know, how do you expect, Compose Coffee to, impact, return on investment at the Jollibee level, or at least shape payback on this investment at, at the JFC level? Yeah. So we're not doing the classic payback like when we build a store, but if we were to use that analogy of investment dollars, depending on if we go cash-on-cash return or whether we go total equity value return, again, as I mentioned, we're financing this through half cash and half debt. So if you just take the debt component and our ability to repay that back, and that's gonna be around, I would say, 5 years. So for an acquisition, usually that type of return is rare. Again, because there's no debt to service on Compose's books, and there's no capital requirement to build stores. Our factory is all set up, so it's pretty much our job will be growth. We'll be focused on expanding network. We think there's still another 1,400 stores or so to go, before we take another look. And beyond that, we're not even looking outside of Korea, beyond that, so we'll stay very focused on this deal because it is a lucrative market. And yeah, so that's how we're looking at it. In terms of valuation growth and the rest of it, I think that's more for Elevation and Titan, because as a private equity, you know, there would be multiples, before they exit. So, if we do end up with a forward of, let's say, sub-7x multiple, they'll certainly make money just on the multiple when they exit in five to seven years' time. But of course, our EBITDA growth plan is there as well, through both store expansion, but as I mentioned earlier, with the menu architecture, shifting more sales contribution from higher value products, is the way we're gonna get there. But we will stay true to what Compose is, and which is a coffee company. Okay. You talked a lot about store expansion. There's a question here on the risk of cannibalization across stores, considering everyone in this segment is growing fast. So, how do you see that, the competitive landscape, you know, evolving in the next couple of years? We've had the opportunity to look at a McKinsey paper on what's important to Korean consumers. Again, I wanna reiterate that this business was founded in Busan. Its stronghold is in Busan. There's presence in Greater Seoul, but as we all know, Greater Seoul is a much larger opportunity. So, we are moving management up to Seoul, Elevation is based in Seoul, so we really have a plan to really get more concentrated in Seoul. But the point here is not everyone is growing. So Mega is growing, we are growing. There are two other significant brands in this space, Venti and Paik's, and they're not growing. And then the segment above, where a lot of the trade-down is coming from, Ediya, they're not growing, they're declining. And we don't need to worry about Starbucks, 'cause it's a very different segment, and location-wise, they're also in very different locations. So where some of our CBTL all stores are, we would not be able to open up a Compose store there because the location is not suitable for a value segment. So growth certainly will come, I think, with the 5%-10% that we've seen over the last 10 years of the coffee segment growing. This is 5%-10% per year, so per annum growth that we've been seeing. Within that, also, the segment growth, and then within that, Compose, in my mind, and here's another opportunity, is not yet a brand. It, it's great coffee that has partial distribution, so we're gonna get the distribution up, in particular, Greater Seoul. We're gonna start to brand more. Getting V from BTS was a huge win because the fact that somebody of his caliber and level and fame was willing to put his name next to our brand means we're starting to become a brand, but I think there's still more work to be done as to Compose as a brand. What do I mean by that? If I was to say Starbucks, everybody would understand that this is a brand. So I see a lot of opportunity, more so than saturation risk. Okay. Thanks, Richard. So there are a couple of questions here, I guess, on store economics. Mm-hmm. So perhaps if you could give some indications of same-store sales with payback, what else? Sure. Yeah, and I guess margins compared to... I guess, how your franchise package is compared to the competition, since everybody's on franchise. So, two of those three, we have data, so I can speak to. The third one, once we close the deal and we are official owners, I think we'll have a better, more accurate answer after seeing data. So one, to reiterate, this is a 100% franchise model, so it's not our capital. The franchisee, typically for Compose, is a single unit franchisee. So 95% of the 2,600 stores is a single unit franchisee. The remaining 5%, I don't think I've seen anyone with more than five stores. This is a strategic intent, because in Korea, the funnel of attracting franchisees, finding them, making sure that they've got the financials and the capability, and then eventually awarding them the franchise, that funnel, one of the key component is landlord relationships. And so some we have landlord relationships, and in some cases, the franchisees do come and say, "I can get that corner. I can get that great spot." And so, from that perspective, the investment risk really for them is KRW 65,000 CapEx, because the buy-in, as I mentioned, was very, very light. And so the payback, typical payback we're seeing is about a year for these folks. And the reason why we think that we are more attractive is, again, we are as we get scale and growth, the brand is gonna become larger, in particular, Greater Seoul, as I mentioned. But in the meanwhile, we're still providing the best quality, best tasting, coffee. And if Americano, Iced Americano in particular, is the number one SKU for all value coffee players, which it is, then you can really tell when you do taste side by side, what is a really good, coffee versus an average coffee. So I think, those are the reasons why they would come to our brand, our franchise opportunity. The answer I don't have is the franchising margins at the moment, because I don't have visibility into 2,600 store PNLs at the moment. But, this data exists, of course, and we could share that in the future. Okay, thanks. Thanks, Richard. There's a couple of questions here on store closures. So what's the rate of store closures, and how many Compose Coffee stores usually close down per year? Yeah. So in 2022, the last year that we looked at, and it's very similar to 2023, I looked at 11-month data, but we can assume it was 12. It was 0.2%. Which, when compared to other businesses, I would say it's incredibly low. Again, footprint is small, store design is very simple. It's not so complex. And so it... You really just have to make sure the store is in the right location for convenience. And you saw that picture earlier, where I showed you 8:00 A.M. So what happens is, somebody comes and they see a long queue, they might say, "You know what? Forget it. I'll just go to the one next door, which has the shorter queue." So we do see consumer dynamics like that, until it becomes a brand, then people become very loyal to the brand. But then once they taste it, and the price is, of course, higher than ours, then I think, that's when we get those customers back as well. So, pretty, pretty interesting. It's competitive in some ways, but in other ways, I think, the founder and the CEO and the team have really understood, you know, best value means lowest price at the highest quality, and they stuck to that, whereas everyone else has taken price. And they managed to outsource everything else to be very lean as an organization. So, there are a lot of learnings, for JFC as well, that we'll get from this business, too. Okay. Thanks, Richard. Let's shift gears a bit. There's a question on the line. Eric, you may now ask your question. Thank you. Hey, Richard, I got a couple of questions. First of all, on the structure, can you go through a little bit more, why is it 70% and then 5% by Titan Fund and then 25%, since Titan Fund is also part of the, the Jollibee family? That's right. So I wanna understand the structuring behind it. Yeah. Great question, Eric, and good observation. First of all, when we started, the discussion with Elevation, they... Elevation wanted significantly more. But over time, I'm gonna call it good negotiation, we're able to really get them in a place where they're happy with their holdings. They're very happy to work with us for opportunities, to, you know, to double or triple this business, in a relatively near term. So we ended up at 70%. The 5% for Titan was a strategic move. You, as you may recall, Titan Fund I, so the first fund, still holds Tiong Bahru Bakery, which also has coffee and one of the best croissants and pastry and bakery, and of course, Common Man Coffee Roasters as well. And so our idea was that, the principals in Titan, the GP partners, they also have extensive experience in Korea in two ways. So one gentleman used to run, Burger King Asia Pacific, so knows the Korean, market very well. And in another way is they currently still manage Tim Ho Wan in Korea. So our franchisee in, Korea for Tim Ho Wan is also the Domino’s franchisee, and there’s over 500 Domino’s in Korea. So we thought, you know what? This is a good investment for everyone, and that sharing of that 5%, really, to your point, is 0.5%, because 4.5% is really us, ’cause we have 90% interest in fund number two. But for that 0.5%, give, if you will, we get so much back in terms of our food strategy. Our food right now, contribution in Compose is less than 7%, whereas Mega is higher, and Tech is higher than even Mega, 'cause Tech is a celebrity chef from Korea, just FYI. So when we look at all the opportunities, to grow our average check and the rolling base, we thought, okay, at some point, food that pairs well with coffee is gonna be something, we need some expertise in. And so Titan, we believe will be a great partner for that. Great. Second question is, if we, if we look at the overall revenue base, Compose Coffee is like around 2% of overall sales. So starting a new country, with 2 percentage points doesn't seem like necessarily a great use of time. Can you elaborate a bit more, what are the kind of, medium, long-term ambition for Korea as a geographies for Jollibee? Yeah. That 2% is underestimated, because again, it's just based on 2023, with a little bit of year to date. We don't have all the financials year to date, so let's call it first quarters, so three months, and best estimate extrapolated. We've run some modeling on a very modest growth rate, just based on the 30-40 new stores we're adding, and we think that's actually in 2025, full year impact, it should be closer to 6% revenue. So, for me, an acquisition that gives you 6%, and the 12% EBIT will be, of course, larger. For me, this is probably a very punchy investment with very low capital risk in the sense that, you know, it's all franchise models. So, we don't see it as a small investment per se. Now, when you look at it from a store footprint, another metric that we get measured on quite often, this will help us get north of 10,000 stores. And, in fact, it will be our number one brand in our portfolio in terms of store count, with Jollibee being number two and then CBTL being number three in terms of store count. So on many levels, this is an important acquisition for us. And again, it's very focused to our market versus sort of being spread out a little bit too thin everywhere. And again, Korea is a top 10, 11, 12 economy in the world, depending on when you measure them. And, yeah, we like the margin structure there. It's a very high cash producing business for us. Perfect. My last question is that when I look at the low price point coffee market, the operator that impressed me the most so far is Luckin Coffee in the sense that they have a fantastic IT systems that b asically predict where would the most profitable next store opening ought to be. Yeah. Can you talk a bit about whether you have looked at this type of technology-based store expansion model, and whether that is, in fact, something that you are prepared to do in your own stores? Great question. We have a lot of respect for Luckin, and so we do watch them and study them, and we do like their model of capital-light and, you know, putting their sort of focus towards technology and product innovation. And now they're trying to become a brand as well, right? So they do brand endorsements and ambassadors. So, there's a lot of things they're doing well. This is, I think, their third or fourth reiteration, because Luckin version 1.0 wasn't so successful, as we all know, and, and they are where they are. So, we don't need to repeat the same, mistakes as them, but we can certainly learn from all their best practices. So at the moment, one of the opportunities was... And by the way, Korea is one of the most wired countries in the world with highest internet access and so on. So mobile ordering is just like China. It's a very natural way of consumers to engage with brands. And when we look at the current app, there is an opportunity—it's a good app compared to most. It was developed by Naver, which is the Google of Korea. But there is an opportunity for us in getting that 7%-8% delivery channel mix up. And so, we are looking at that. It'll be an outsourced model. We're not gonna invest, you know, in a high expensive Tech infrastructure, but there's plenty of companies out there that we can work with to give us that solution. So you're absolutely right. I think the fact that V, when we announced him, there was about 11-12 million new registrants onto Compose's app. It's a 55 million population country. So when you think about the percentage, it's quite mind-blowing. But for us to be able to then convert those new registrants into repeat consumers, that's the opportunity that we're looking at in terms of technology. So yeah, you're spot on, and that is something we will invest in. Thank you. Thank you, Eric. Okay, thanks, Eric. Our next question comes from the line of Louis. Louis, you may now speak. Hi, Louis. I think you're on mute. Okay, perhaps we'll, we'll get back to Louis in a while. Sorry. We'll take another question here, in the chat. You mentioned that the in-house roasting facility is one of the key advantages for Compose Coffee. What is the maximum number of years or stores that it can... Your current capacity can accommodate? And what would be the estimated investment to expand capacity if needed? Yeah. So it's a 9,000-metric ton per annum capacity. Excuse me. Brand new equipment. So, in terms of having to expand lines or, roasting, equipment, et cetera, it's, it's not in the plan. We currently have 2,600 stores. We think we can get this up to 4,000 stores within the next four years, 4-5 years. So therefore, the 3,200 metric ton and change, let's call it 3,300 metric ton number that we saw, it could actually triple, before we would have to even think about moving and adding an additional shift. And if we add an additional shift, we can get another 4,000 metric ton-5,000 metric ton on top of the 9,000 metric ton. The answer is, we have capacity to, I think, go all the way, to getting to number one and beyond in Korea. Okay. Thanks, Richard. There's another question here. I guess, given the recent volatility on coffee prices, how has Compose been managing this? Yeah. So if I look at 2021 and 2022, I think on their P&L, there was an adjustment of around KRW 2 billion-KRW 2.5 billion impact to normalize the bean price because of the price spikes. We're not seeing that in 2024. In fact, we're not seeing that into, I would say, halfway of 2025, because the hedge is already taking place, and we have enough beans coming through. So it will come, the spikes will come, and so forth. So there's few ways we're gonna deal with that. Of course, not a single origin blend, meaning we're not stuck in one country bean. I think that helps to have some options, because we're blended versus a single origin. Secondly, I'm seeing now not only 12 but 18 months forwards. Earlier, I mentioned to you that we're not using an importer. We're actually working as co-procurement with a local, very experienced, firm that does fantastic buying. We'll keep working with them. We'll continue to be their number one customer, so we get the best price and the best resource attention. That's how we're managing. But it does come through the P&L, when they do spike without a hedge. Yeah, so it's a reality, but I think that's normal in the coffee business, and we'll manage it through. And the way you price it to your franchisees, it's like a, it's a cost plus, is it? I haven't seen- Or do they feel the volatility? ... I haven't seen the franchisee margin, so I don't know how our pricing is to the franchisees. But when we have more data, I can maybe come back to that point. But I think like in any business, there's partial pricing to your customers, and then there's partial ways to absorb it through, you know, your own resources, such as hedging and blending and so forth. Okay. There's a few more questions here on box economics. I don't know if you'll be able to provide. Could you share average daily sales for a Compose Coffee outlet? Oh, yeah. You did ask me that earlier. So, this is 2023 data. So, again, we're not owners yet, so, I do have quite a bit of data, but not all the data I need. So 2023, it was KRW 21 million per store per month. And so, people can, I guess, extrapolate that out to kinda get the AUV. Now, how does it compare, which is the more interesting question? How does it compare to other value segment players? So we do benchmark very closely, Mega. Mega is private equity-owned, much longer than Compose, and Compose is still single owner-owned. But when you look at Mega, they push quite a bit, the non-coffee products, which tend to be higher average cup sale, average selling price per cup. They're around KRW 26 million per month per store. So that KRW 5 million, which is roughly 25% gap between us and number two and number one, Mega, that is a very interesting target because strategically, in the past, the chairman did not ask them to chase it down. It was not a KPI. And the reason is because the chairman believes we have to have our strength, which is coffee. So again, back to the Americano pricing. When your average cup is KRW 1,500 versus KRW 3,000, then your average daily sales will reflect that. So we have some ideas around staying true to coffee by line expanding or line extending into premium expressions. So we have some ideas around that as well, which we think could get the pricing up while keeping our core base still at KRW 1,500, which is a real strategic point for us because people do appreciate that right now, especially with the economy of today. Okay. Thanks. Thanks, Richard. I think Louis is ready to ask his question. Okay. Hi, Louis. Yes, yeah, thank you. Hi, Richard. Sorry about that earlier. I'm actually on a train in Europe, so it's becoming a little sketchy. Oh, okay. My real question is this: When the announcement about this purchase, my first real question is that CBTL and Smashburger were both in both acquisitions equally excited, but we know that it's been a challenge for both. Now, here, I can hear again your excitement, so what would make this very different from the experience you had with both? I'm sure it's a different market, but whatever. But what makes this particular acquisition different from both the CBTL and Smashburger experience? Yeah. No, it's, that's the elephant in the room, so let's address that. I don't know what the criteria were in the past. I was not there for those acquisitions, so I don't wanna speak on behalf of others who've had, you know, logical thoughts, I'm sure. But from a CFO perspective, there are key differences. So when we bought CBTL, the EBITDA marg, sorry, EBITDA multiple that we acquired the business at was 14.7x. And at that time, if you were to benchmark to Starbucks at 13.5x, you can argue that you actually bought a business that was trading higher, a valued higher than the world's leading premium coffee player, which is Starbucks. Valuation here, as I've shared, is considerably different. Point two, at store level, CBTL made money, but with all the G&A added, it was actually a business that required some time to make profitable. This business is profitable from day one. And then the last difference, I would say, even though this business is 100% franchised, and at that time, CBTL's business was 70% franchised, I have to say, being a single market really concentrates our ability, especially the local talent on the ground, to be able to continue this momentum. So our opportunity to buy a business, continue the momentum, and put improvements in, plus the multiple, plus the fact that it's money-making and it's accretive, where CBTL was not an accretive to the total value of JFC. So I think those will be the main reasons why I'm personally very excited. So this is actually my first acquisition with this company. I've been here about two years now as CFO. So, yeah, I'd rather speak more about Compose than the past. However, the past is still the present, so I am responsible for making sure CBTL and Smashburger gets its value and, and, you know, we're doing quite a bit of good work on that. And, I'm hoping that soon we can announce some results for Q2 on CBTL U.S.A., which is very exciting as well. Okay. Good to hear. Thank you for the question. Thank you. Okay. Thanks, Richard. I think that's all the time we have for today. I know there are still some questions that are unanswered, so the IR team will get to that and get back to you on those unanswered questions. Thank you, Richard, for your time and for all the details that you provided. We very much appreciate it. Thank you also to Cossette and Mona for helping us out today. Great. A big thanks to everyone who's taking the time to join us, and I know we have different time zones in Europe as well, so thank you so much for that. Carissa, wonderful job. Thank you so much for getting us through this, very professionally and on time, and to Regis Partners, and of course, to Mona and Cossette, my brilliant IR team. So thank you, everyone. Thanks, everyone, and have a good day.