Max's Group, Inc.MAXS

Max’s Group posts stronger 1H 2023; outperforms pre-pandemic levels

Manila, Philippines, 14 August 2023 – Max’s Group, Inc. (“MGI”, the “Group”, or the “Company”), the largest casual dining restaurant group in the Philippines posted net income of P246 million for the 1H of 2023 which outperforms its 2019 performance by 54%. Organic net income excludes the sale of a subsidiary whose sole asset is land.

The Group’s system-wide sales (“SWS”) is back to pre-pandemic levels at P9.2 billion across both company-owned and franchised stores in the global network achieving 95% of its 2019 performance despite lesser stores from closures during the pandemic. As compared to the 1H of 2022, sales jumped by over P1 billion or a 14% increase and converted to revenues of P5.9 billion, a 17% increase from the previous year.

Strong 1H 2023 results were primarily driven by Max's Restaurant and Pancake House, which experienced a rebound from a challenging first quarter last year. Yellow Cab Pizza and Krispy Kreme continue to perform with a strong brand equity. Meanwhile, operations of the international segment remained healthy with a combined 6% growth in SWS across Asia, North America, and the Middle East.

Despite the challenges in commodity hikes, the Group’s tightened business models implemented during the pandemic continue to have a positive impact on margins. Strategic measures during the first half of the year cushioned the impact of headwinds as seen in gross profit of P1.9 billion or a 33.0% margin, representing a significant improvement of over 500 basis points as compared to 27.7% in 2019.

"MGI’s consistent execution of our customer-centric strategies, backed by tried and tested business models have cushioned the impact of commodity hikes and global economic challenges. MGI remains strong despite current market conditions,” said Robert F. Trota, President and Chief Executive Officer.

MGI's earnings before interest, taxes, depreciation, and amortization ("EBITDA") and net income margins remained stable for the period. For 1H 2023, MGI posted organic EBITDA and net income margins of 16.6% and 4.3%, respectively. These results are softer versus last year’s 19.7% and 5.6% due to higher material costs, but still more efficient than the organic 2019 margins of only 14.7% and 2.3%, respectively. Including one-off gains, 1H 2023 EBITDA and net income margins were reported at 17.2% and 4.2%, respectively.

In addition to the Group's portfolio of brands, MGI has expanded its presence in the business-to- business ("B2B") space by providing restaurant-quality food to 2,585 locations and counting, comprising mostly top-of-mind supermarkets and convenience stores nationwide. This expansion aligns with the Company’s efforts to tap into food retail, which is a promising category to supplement its core restaurant and commissary businesses.


"On top of the excellent food and service we provide to the loyal customer base across our brands, we have fortified our B2B presence and ramped up food manufacturing services to third parties. Despite the potential challenges in the second half, we are excited to see MGI and its brands flourish given the return of dine-in, expected holiday season spending, and diversified business model that allows MGI to shape the future through unparalleled foodservice, food retail, and food manufacturing,” remarked Mr. Trota.

As of 30 June 2023, the Group’s store network covers 14 territories, with 593 Philippine sites and 66 stores situated across various locations in North America, the Middle East, and Asia.