Max’s Group, Inc., the largest casual dining restaurant group in the Philippines, is reporting its operating results for the fourth quarter and full 12 months ended December 31, 2020.

MGI posted fourth quarter systemwide sales (“SWS”)—comprised of sales generated by both company-owned and franchised stores—of P3.01 billion and revenues of P1.94 billion, an increase of 34% and 40% from the previous quarter respectively. Comparatively, SWS decreased at a rate of 46% versus P5.57 billion generated during the same period of 2019.

For the full 12-month period of 2020, the Company recorded a total SWS of P10.85 billion, a 46-percent decline versus the P20.11 billion performance of 2019. Revenues likewise softened by 50 percent to P7.14 billion, as compared to the P14.40 billion reported for the entire 2019.

“This extraordinary year was a reflection of the global restaurant industry performance amidst the COVID-19 pandemic,” stated MGI President & CEO Robert Ramon F. Trota. “Nevertheless, we have taken this opportunity to overhaul our operating structure for a nimbler future. We have chosen to focus on our core brands of Max’s Restaurant, Yellow Cab Pizza Co., Krispy Kreme, and Pancake House to maintain market relevance through channel and menu innovation, while likewise optimizing our store network and overall cost structure. Overall, we are proud of how we navigated these challenging times, with multiple bright spots for growth. We continued to strategically invest in opening stores throughout the pandemic with our partners both locally and abroad. Our international markets have demonstrated remarkable resilience to partially offset the challenges in the local environment. Such brands as Yellow Cab and Krispy Kreme in particular have continued to thrive in the market, with recovery outpacing the rest of our portfolio.”

“The continued shift in pandemic restrictions drove the volatility of local performance,” continued Trota. “The Philippine government easing of dine-in restrictions from June onwards provided a strong upside over the second half of the year, a brief pause via a two-week modified enhanced community quarantine (MECQ) in Metro Manila and parts of Luzon notwithstanding. Core off-premise channels such as Delivery and Take-Out performed at indices exceeding even pre-pandemic levels, proving that consumer demand for our portfolio of most-loved brands remains more vibrant than ever.”

“Thus, sequential quarter-on-quarter growth throughout 2020 outpaced our own internal expectations,” he added. “This gives us belief in our ability to eventually recover our previous performance, and confidence in how our organization is built for the future.”

The international business, likewise, posted an upward trend with SWS increasing by 9% from the previous quarter and only demonstrating a 25-percent dip as compared to the same quarter of 2019.

The Company ended the fourth quarter with EBITDA amounting to (P8) million, and a net loss of P700 million. For the full 12 months of the year, EBITDA stood at (P123) million, with a net loss of P1.68 billion. This figure includes aggregate one-off costs after tax of P727 million associated with business reorganization.

“More than ever, we are thankful for a seasoned, agile management team. Amidst the steep operating losses from the first two quarters of the pandemic, we chose to be decisive in taking these uncertain times as an opportunity to restructure and re-skin our identity as a business to take advantage of tomorrow’s growth,” Trota concluded.

Overall initiatives to optimize both costs and cashflow were key in the Company’s gradual but sustained recovery. The focus on core brands was essential to these efforts, while actualizing the benefits of year-long efforts in balancing marketing investments, building up supply chain efficiencies, mindful inventory management and utilization, menu margin management, ramping up collection of receivables, head office relocation, rightsizing of staffing, and alliances with lessors on rental concessions. Total expenses for the fourth quarter decreased by 21% versus the same period last year and 18% for full year, net of one-off restructuring costs and impairments.

MGI Group Chief Operating Officer Ariel P. Fermin stated, “We are determined to come roaring out of this temporary downturn of 2020, having accelerated three years of strategy into three quarters of execution. Our off-premise business across all core brands is more robust than ever.”

“We believe we were quick to spot green shoots with reliable returns,” continued Fermin. “We have made significant in-roads in accelerating our B2B stream through new consumption formats like Ready-to-Cook and Ready-to-Heat. Our brands are now being found in such respected retailers as SM Markets, FamilyMart, Lazada, and Shell Select. Frankly, we imagine a future model unencumbered by population mobility, local restrictions, or physical store presence. Our commitment to our stakeholders to continue building the brands most-loved in our industry remains steadfast, with the ability to generate demand, provide value to existing fans and new customers, manage for profit, and retain and nurture talent—all across a deep, diverse channel mix balanced across B2B and B2C, on-premise and off-premise.“

As of 31 December 2020, the Company’s store network totaled 14 territories, with 604 Philippine sites and 59 stores situated across various locations in North America, the Middle East, and Asia. Out of these 663 stores, 95% or 630 stores were operational.