Annual Report 2020 About the Cover When faced with a monumental challenge, few are able to swiftly form high- impact solutions to make the situation better. It requires agility and adaptability to achieve a transformational outcome. This year, JG Summit swiftly addressed the effects of the pandemic, using its “How to Win” and “Where to Play” strategies to maximum effect. The company was agile in business, as well as steady and firm in uplifting communities to better endure this critical time. By focusing on employee health and safety, operations and supply chain continuity, cash, costs and liquidity management, and helping communities deal with the pandemic, JGS was able to weather the unexpected storm. The company also doubled its efforts to explore new business opportunities. This year’s cover demonstrates the diverse response throughout JG Summit’s businesses - its fluid and agile response that demonstrated firm leadership, mindfulness, and strength to balance business in the face of turmoil and change. 2 Annual Report 2020 Table of Contents JGS at a Glance 4 2020 Key Developments 7 JGS Investment Portfolio 9 Corporate Structure 10 Geographic Presence 12 Chairman’s Message 13 President and CEO’s Report 17 Leadership 21 Our COVID-19 Response 23 Laying the Foundation for the New Normal 27 Strategic Business Units & Investments 38 Strategic Business Units 39 Ecosystem Plays 57 Core Investments 63 Sustainability 65 Sustainability Performance in 2020 66 Gokongwei Brothers Foundation 77 Corporate Governance 86 Financial Statements 96 Contact Info 221 3 Annual Report 2020 JGS at a Glance 4 Annual Report 2020 JGS At A Glance: Key Business Metrics Our portfolio diversity cushioned the impact of COVID-19, driven by The Company’s robust balance sheet provides Continuous shareholder value maximization as JGS’ the resiliency of our food, banking, and office segments, while heavily- enough ballast to weather the pandemic. share price outperformed the PSEi in 2020 impacted businesses began to recover quarter on quarter. 999.6 928.3 Share Price Index Consolidated Performance 819.3 100=Yearend 2019 120 93 Revenues Core Net Income 100 80 91 ₱221.6 billion ₱450 million 60 2018 2019 2020 40 Total Assets 20 (in billion pesos) 0 Key Financials excluding Cebu Air, Inc. which operates in one of the Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec PSEi JGS most challenged industries globally due to COVID-19 408.6 408.1 367.5 Revenues Core Net Income ₱199.0 billion ₱15.3 billion Declared and Distributed 2018 2019 2020 Cash dividends totaling Total Equity (in billion pesos) Revenues across JGS’ business units show sustained quarterly improvements from 2Q ₱2.7 billion 8 or ₱0.38 per share 67.9 Healthy Current 6 2.3 2.8 and Gearing ratios 4 54.4 11.4 50.7 48.6 2.3 2 2.1 Stock dividends equivalent to 6.8 2.5 7.3 1.02 0 15.9 4.4 0.96 3.8 5.2 4.5 0.93 1.4 3.3 5% -2 2.0 0.78 of outstanding shares -4 0.67 0.67 33.5 34.0 32.4 33.2 -6 -8 1Q20 2Q20 3Q20 4Q20 2018 2019 2020 URC CEB RLC JGSPG RBank Others Total JGS At A Glance | 5 Annual Report 2020 COVID-19 Key Initiatives Cost and Liquidity Management COVID-19 Employee Support We implemented austerity measures to focus spending on necessary operating and capital expenditures needed to sustain our current operations. 5,152 Up to 120 hours of Php19.2M 346,814 Inquiries addressed Advanced Vacation Reduced Non-essential spend such as training, travel, entertainment worth of Robinsons Units of medical via COVID Care Leave and up to 120 expenses to manage our operating costs. Rewards Points supplies donated to Telemedicine Service hours of Advanced funded by GBF for over 50 hospitals Sick Leave to cover 10,136 affected Third Full Year consolidated General and Administrative Expenses* in 2020 lower by employees as needed Party employees Dailty Health Monitoring in all units ₱1.37 billion Daily On-Site vs. same period in 2019 Allowance Over P during ECQ: *excludes non-cash charges 100K Php250-Php500 Php1.5B Reusable face 782 Daily Meal Raised as part of shields donated in Allowance Project Ugnayan Employees assisted via partnership with URC during ECQ: for affected families CAPEX Recalibration RT-PCR testing Php75-Php100 during ECQ From an original 2020 budget of Php82.8 billion, we have continually trimmed our capital expenditures and ended up spending only Php37.3 billion for the full year of 2020. The Gokongwei Group’s COVID Care platform provided remote medical assistance for COVID-19 concerns To ease employee work arrangements, we 2020 for all organic employees and third-party workers. In granted assumed attendance as appropriate 82.8 partnership with ActiveOne Health/Reliance United, for the welfare of our people. This amounted the telemedicine service includes patient diagnosis, to Php536M salaries paid on an assumed 72.1 monitoring, e-prescriptions, and return to work attendance basis. clearance. Last year, the service addressed a total of 5,152 23 inquiries, aiding our people during the pandemic. 25 We implemented Daily Health Monitoring via the JG Aside from attendance considerations, we also 18 Health App, which is part of our safety protocol for on-site granted advanced vacation leaves and advanced employees. Employees who were working from home also sick leaves to employees who have exhausted 12 37.3 utilized the application to track their health status upon their current allocation. The paid leaves covered falling ill. The system flagged health concerns, ensuring employees who were unable to work due to ECQ that employees receive necessary medical support in a restrictions, which caused the temporary closure 15 28 timely manner. of operations for certain business segments. 26 11 4 The Company also ensured accessible RT-PCR testing 12 for its people. The test remains as the gold standard For employees who had to report on-site, we 9 7 for detecting COVID-19, as recommended by triage provided a Daily On-Site Allowance of Php 250- 2019 Actual Original Budget Actual professionals. Under this initiative, 352 employees were 500 based on their job level. We also provided a assisted in 2020 with the support of our partner hospitals: P Daily Meal Allowance of Php75-100 on top of the Lung Center of the Philippines, The Medical City, and the initial allowance amount. URC CEB RLC JGSPG RBank Others T3 Consortium of AC Health facilities. JGS At A Glance | 6 Annual Report 2020 2020 Key Developments January February March April May June • Universal Robina • RBank won Project of • Cebu Air, Inc. (CEB) • CEB started the Seat • RLC introduced Rdelivery, • Gokongwei Brothers Foundation Corporation (URC) launched the Year - Finastra for its started handling Occupying Cargo flights. Rshopper & Pick-up joined a consortium that was exciting new products on the Treasury IT Solutions Cargo charters and Stations that offer safe and formed to boost the national beverage segment such as C2 Opics. Hybrid flights carrying • RBank launched RBank easy ways for customers testing capacity. Milk tea, made from 100% more than 50kg of Sign Up, an online account to shop at the comfort of natural tea leaves and real humanitarian shipments opening platform. their homes. • CEB streamlined inflight food and creamy milk, and Great Taste which include PPEs, merchandise offerings with Barako, a mix of barako Medicine, Test Kits and • RBank launched RBank cashless transactions. coffee and brown sugar. Blood Bags. QuickR. • URC partnered with Lazada to • Robinsons Bank Corporation drive online presence for its (RBank) successfully consumers. integrated RBank POS terminals with 100% of • Luzon International Premier RRHI’s Cash Registers. Airport Development Corp. (LIPAD) established One • Robinsons Land Corporation Stop Shop alongside various (RLC) launched Sapphire government agencies to ensure a Bloc South and Sierra Valley seamless arrival experience Garden 1. for passengers. JGS At A Glance | 7 Annual Report 2020 July August September October November December • JGS raised US$600 million • RBank was awarded as the • RBank launched RBank • JGS declared 5% stock dividends • CEB divested its remaining shares in • CEB’s second ATR Freighter arrived. from an offshore bond Fastest Growing Commercial Mo for agency banking to its shareholders. SIAEP, and acquired the remaining issuance at 4.125% interest Bank - Philippines 2020 and RBank Digital, a shares in A+ for better capacity • CEB started its “Test Before rate per annum. in the Global Business new mobile banking • CEB introduced the New Normal planning. Boarding” initiative in General Outlook Awards 2020 application. Compensation and Benefits Santos city. • RBank launched RBank and the Best Commercial Package for productivity- • CEB’s first ATR Freighter arrived and Sign Up Payroll Digital Bank - Philippines 2020 based and experience-based reconfigured one of its A330 planes • The New Passenger Terminal Account Opening. by International Business compensation scheme for its for cargo. Building Shell was handed over to Magazine. employees. LIPAD. • DHL Summit Solutions, • RBank was awarded as the Fastest Inc. (DSSI) started • RBank partnered with Sprout • RBank launched Electronic Growing Retail Banking Philippines • JG Summit Petrochemicals Group commercial operations Solutions Inc. for seamless Invoice Presentation and by Global Banking and Finance. (JGSPG) marked the 20th year of with URC as its primary payroll solution. Presentment. its Abot Kamay Christmas Outreach customer. • RLC closed two deals with logistics program for the elementary schools • RLC completed its office • RLC soft launched a new and multinational companies under in its host communities. building Davao Delta Tower 2. residential brand called RLC RLC’s co-working brand - work.able Residences, a merger of its which now has a total number of five • DSSI achieved 92% service previous vertical residential centers coverage for URC’s Luzon transport groupings namely Luxuria, operations.