Coca-cola Icecek A.s. · BIST:CCOLA
Coca-cola Icecek A.s — Q1 2017 Earnings Presentation
28 slides from Coca-cola Icecek A.s's earnings presentation, May 2017
Slide 1: Investor Presentation
Investor Presentation
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation includes forward-looking statements including, but not limited to, statements regarding Coca-Cola İçecek’s (“CCI”) plans, objectives, expectations and intentions and other statements that are not historical facts. Forward-looking statements can generally
Slide 3: Agenda
Agenda Introduction & Strategy 1Q17 Volume Performance 1Q17 Financials 3
Slide 4: A regional powerhouse...
A regional powerhouse... 25 plants TL 7 bn annual revenue 1.4 bn uc annual production capacity TL 1.1 bn annual EBITDA 5th largest bottler 26 bn annual servings 1.2 bn UC sales volume 380 million people 10 countries 4
Slide 5: ...expanding with a diversifying portfolio
...expanding with a diversifying portfolio Category Breakdown Geographical Breakdown Geographical Breakdown Kazakhstan Tea 8% 8% Other Pakistan Water Turkey 25% 15% Iraq 8% 15% 81% Others 8% 2006 Still 6% 2016 2006 2016 Sparkling 85% International 19% Sparkling 71% Turkey 51% 17 brands 34 brands 424
Slide 6: CCI is the fifth largest bottler today...
CCI is the fifth largest bottler today... Coca-Cola European Partners Coca-Cola HBC Revenue: USD 10.1 bn Volume: 2.0 bn uc Revenue: USD 6.9 bn Coca-Cola Icecek Volume: 1.2 bn uc Revenue: USD 2.3 bn Coca-Cola Femsa Volume: 3.3 bn uc Revenue: USD 9.5 bn Coca-Cola Arca Volume: 1.7 bn uc Revenue: USD 5.
Slide 7: ...as opportunities are ahead with low per cap consumption...
...as opportunites are ahead with low per cap consumption... Per Cap Consumption (lt) (2016) 160 Mexico 140 Relatively low per 120 Argentina capita consumption USA across our territories 100 Germany South Africa 80 Spain Sparkling beverage UK Saudi Arabia consumption to Bulgaria increase with GDP pe
Slide 8: ... and favorable demographics
... and favorable demographics 380 MILLION 70 MILLION CONSUMERS NEW CONSUMERS BY 2025 2016-2025 Population Average Growth in CCI 16% Territory World Growth 10% 8
Slide 9: We win in the marketplace...
We win in the marketplace... Grow Sparkling Selectively Expand Stills Availability Affordability Acceptability Win, Activation build, participate Commercial Success Prioritize Value Management Win at the Point of Sales SFE RTM RED Data Standardization Opportunity Mapping CDE Management E-Commerce OB
Slide 10: and create shareholder value
and create shareholder value Volume Revenue EBITDA Profitable growth 11% 17% 17% CAGR 2009-2016 CAGR 2009-2016 CAGR 2009-2016 Cost CapEx/Sales OPEX/Sales efficient 10% 25% in 2016 vs. expansion 28% in 2009 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 Average 2009-2
Slide 11: Volume growth across all regions in 1Q17
Volume growth across all regions in 1Q17 Turkey Volume International Volume Consolidated Volume + 3.2% + 5.1% + 2.7% + 7.6% 233 222 116 119 114 106 1Q16 1Q17 1Q16 1Q17 1Q16 1Q17 • Strong sparkling growth in Turkey • Positive momentum in Pakistan • Continued recovery in Central Asia • Difficult macro
Slide 12: Turkey volume up by 2.7%
Turkey volume up by 2.7% Strong sparkling growth in 1Q17 • Improving consumer sentiment and positive momentum in March • High single digit growth in Coca-Cola, Fanta and Sprite brands • Successful launch of new packages and flavors, transition to 330 ml sleek cans Sparkling up by • Stills volume dow
Slide 13: Pakistan & Middle East volume up by 7.6%
Pakistan & Middle East volume up by 7.6% Positive momentum continues in Pakistan • 9.4% volume growth in Pakistan, cycling 12.7% growth in 1Q16 • “Coke and Meal” and “Sprite & Spicy” consumer activities and the launch of 1.75 lt PET • Effective discount management supports margin expansion Increasin
Slide 14: Central Asia volume up by 7.6%
Central Asia volume up by 7.6% Encouraging recovery in Central Asia • Double digit growth in Kazakhstan and regained momentum in Azerbaijan • Successful market execution and macroeconomic recovery in Kazakhstan 11.5% 37.0% growth in growth in ▪ Launch of 1.75 lt packs in Fanta and Sprite Kazakhstan
Slide 15: Financial Metrics: On Track
Financial Metrics: On Track Volume Net Revenue EBITDA 233 mn uc TL 1.556 bn TL 194 mn +5.1% vs. 1Q16 +19.5% vs. 1Q16 +24.5% vs. 1Q16 OPEX Capex / Sales* FCF Margin 26.5% 1.6% - TL 55 mn vs. -2.1pp vs. 1Q16 -0.4pp vs. 1Q16 - TL 37 mn in 1Q16 *Trailing 12 months
Slide 16: Consolidated net revenue per uc up by 14%
Consolidated net revenue per uc up by 14% (TL) 1Q17 1Q16 Δ% Net revenue per uc up by 1% in Turkey Turkey • Price increases on 2.5 lt packs in March Volume (mn uc) 119 116 3% Net revenue per uc 5.98 5.90 1% • Some dilutive impact due to higher share of FC and NRTD tea International Volume (mn uc) 114
Slide 17: Increased contribution of int'l on gross margin
Increased contribution of int’l on gross margin (TL) 1Q17 1Q16 Δ% Gross margin contracts by 114 bps on a consolidated basis due to: Turkey • Higher contribution of int’l operations in total gross profit Cost per uc 3.61 3.54 2% • Lower gross margin in Turkey Gross Margin (%) 39.6% 40.0% (40 bps) Int
Slide 18: Opex initiatives drive EBITDA margin expansion
Opex initiatives drive EBITDA margin expansion 1Q17 1Q16 Δ% Improvement in opex/sales on a consolidated basis: Turkey • Tight opex management Opex / NSR (exc.other) 33.5% 32.0% 150 bps • Operating leverage and savings in international operations EBITDA Margin (%) 23.4% 23.0% 40 bps EBITDA margin exp
Slide 19: Net working capital / sales improves
Net working capital / sales improves NWC / Sales CapEx / Sales FCF (TL mn) 1Q16 1Q17 10.5% 8.9% 2.0% (37) 1.6% 1Q16 1Q17 1Q16 1Q17 (55) • Declining trend in net working capital / sales continues • Lower CapEx / Sales in 1Q17 • Free cash flows remains in the negative territory in 1Q
Slide 20: No major financing needs in 2017
No major financing needs in 2017 Financial debt (USD million) Net FX Loss (TL mn) Maturity (USD million) 1.071 1.072 4% 2% 9 17% 22% USD 500m 1Q16 1Q17 Eurobond + (90) USD 100m 79% 76% USPP 2016 1Q17 2017 2018 2019 2020 2023 USD EUR TL & JD & KT & PKR Working on loan portfolio currency NetUSD/TL Net
Slide 21: Financial leverage ratios continue improving
Financial leverage ratios continue improving Net Debt (USD million) Net Debt / EBITDA Net Interest Coverage Ratio 6.9 6.6 6.7 846 2.29 2.10 2.22 652 691 1Q16 2016 1Q17 1Q16 2016 1Q17 1Q16 2016 1Q17 Continuing to deleverage Net Debt/EBITDA to be below 2x in 2017 Interest coverage relatively flat
Slide 22: 2017 Guidance
2017 Guidance Sales Volume: • Consolidated: mid-single digit growth • Turkey: low-single digit growth • International: high-single digit growth Financials: • Net Revenue growth expected to exceed volume growth • Flat to slight improvement in EBITDA margin, compared to 2016 • Capex to Sales ratio of
Slide 23: Appendix
Appendix23
Slide 24: We are building a sustainable business
We are building a sustainable business First and only company in Turkey and Succesfull within the Coca-Cola system to be included in the UN Global Compact cost & opex Included in Borsa Istanbul 100 Index management Sustainability Index Positive FCF Recognized as one of Turkey’s top carbon performanc
Slide 25: Country Data - 2016
Country Data - 2016 Estimated Per cap consumption CCI’s market Share in GDP per cap. % of pop. below Country GDP Growth (1) Inflation (1) Pop. (mln) (1) population CAGR of sparkling share in CCI’s (PPP) (2016 est) (2) 30 years (5) (2016-2021) (1) beverages (L) (3) sparkling (4) Volume Turkey 3.0% 21
Slide 26: Leading market positions in our geography
Leading market positions in our geography Turkey Pakistan Kazakhstan Iraq #1 position in sparkling; 64% #2 position in sparkling; 37% #1 position in sparkling; 49% #1 position in sparkling in North Iraq; 56%* #1 position in juice; 25% 2% market share in juice #3 position in juice; 12% #2 position in
Slide 27: Ratings
Ratings Credit Ratings Long Term Issuer Rating, ‘Baa3’, Negative Outlook (Moody’s rating, March 22, 2017) Long Term Foreign Currency IDR, ‘BBB-’ Stable Outlook (Fitch Rating, February 1, 2017) Corporate Governance Rating 9.45 out of 10 (Saha Rating, July 1, 2016) 27
Slide 28: CCI Investor Relations
CCI Investor Relations Tel: +90 216 528 4000 Fax: +90 216 365 8457 [email protected] www.cci.com.tr ------------------------------------ Deniz Can Yücel Head of Investor Relations Tel: +90 216 528 3386 [email protected] Borsa Istanbul: CCOLA.IS - Bloomberg: CCOLA TI - Reuters: CCOLA.IS ADR-OTC: