"I am especially proud of our president, Ramon Ang, my longtime friend, for being the leader we needed during this difficult time."
This is the final speech and report San Miguel Corporation Chairman and CEO Eduardo M. Cojuangco Jr. on SMC operations written days before and prepared for delivery at SMC’s annual stockholders’ meeting on June 30, 2020. But he died on June 16, 2020. SMC CFO Ferdinand Constantino read the speech just the same, in tribute to ECJ, and to honor his memory. ECJ was SMC chair from July 7, 1998 to June 16, 2020.
Fellow stockholders, we meet in difficult times.
Never could I have imagined chairing a stockholder’s meeting in this way. The COVID-19 pandemic is the single, most life-altering event on a global scale since World War II. Lives have been lost. Businesses have gone under with unemployment rates not seen since the Great Depression.
Yet I also know that San Miguel is better positioned to transition to the next normal and emerge stronger from the pandemic.
Allow me to report to you our 2019 financial results:
Consolidated revenues reached P1.02 trillion, reflecting strong revenues from most of our major businesses despite the setbacks suffered by Petron.
Our Beer, Spirits, and Power businesses did very well, allowing us to finish the year with a consolidated operating income of P115.7 billion and a consolidated net income of P48.6 billion. EBITDA of P162.4 billion was 3% higher than in 2018.
The challenges facing the oil industry took a toll on Petron—in the past, one of our most reliable profit centers. Hard hit by volatile input costs, San Miguel Foods turned in a mixed bag of results given the supply glut in poultry and the Asian Swine Flu that affected hog and feed volumes. We have seen a marked improvement in San Miguel Foods in the first quarter of 2020.
Again, due to the pandemic and the related disruptions resulting from the lockdown in Luzon and much of the Philippines, our first- quarter, 2020 figures are wanting but not entirely unexpected.
Much of what has dramatically changed about business and about everyday life has been deeply unsettling. Pandemic brought out the best in us
Yet for San Miguel, the pandemic has also brought out the best in us and has—I am very proud to say—made us a more efficient, resilient company than ever before.
I am proud of the way our company has quickly pivoted during the COVID-19 pandemic. We saw this in Ginebra San Miguel, which switched to producing disinfecting alcohol within days of the crisis. We saw this in San Miguel Foods which churned out flour and bread and other essential food items by the thousands—just so that there would be enough to stock the supermarket shelves, and address the very real food security challenges of lower-income families.
I am proud of our employees who kept our facilities running at full capacity, living inside the factory gates for over two months away from their families.
Ramon Ang, the leader during this difficult time
I am especially proud of our president, Ramon Ang, my longtime friend, for being the leader we needed during this difficult time.
Because of Ramon, our company responded to every need, spending hundreds of millions of pesos on medical equipment, COVID-19 testing machines, ventilators, quarantine facilities, and PPEs, supporting our health services and our government at every turn—without being asked to do so.
How Ramon behaved and how he led us to collective action will be remembered for many years to come.
As we begin our recovery as a nation, we face enormous transitional challenges. But as a company, I believe we are in good shape. We will act with the agility that’s become instinctive to us in the last few months. Our supply chains are already more resilient.
Our cost base remains appropriate and manageable in these challenging conditions. We have identified further actions to increase efficiencies and reduce spending. We are working to protect our cash flow and are pro-actively managing our working capital.
Once things start to get back to normal, or near normal, few companies will be armed with a balance sheet as strong as ours.
In our food and beverage business, we’ve made investments towards digital and shifted our sales and marketing from traditional channels to more online selling. We’ve incorporated the lessons of the last few months into our operating model, and stand to benefit from our enterprise-wide ability to absorb the kind of pressure and uncertainty that has been our everyday work diet since the pandemic first started.
We are full steam ahead with our expansion efforts.
We are still pursuing our plans to build the airport. We know the jobs we will create will help reset the economy, and help it recover and move forward.
This year your company is 130 years old. And while we are experiencing unprecedented times as a result of COVID-19, the hope is that over time, this period will look like a temporary pause in life as we know it.
When we look back at this time, we can be proud of how together we took action to help our country survive this crisis. We can be proud of how our employees and leaders played their part in a narrative of hope: one that will allow us to put this difficult chapter behind us, and help us rebuild for the better days that I know lie ahead.
Maraming Salamat po. Stay safe and keep well.