Coca-Cola Icecek A.S. · BIST:CCOLA
Coca-Cola Icecek A.S — HSBC's CEEMEA Investor Forum 2013
38 slides from Coca-Cola Icecek A.S's conference presentation, Sep 10, 2013
Slide 1: HSBC's CEEMEA Investor Forum
HSBC's CEEMEA Investor Forum 10-11 September 2013
Slide 2: Business Overview & Strategy
Business Overview & Strategy 1H13 Operational Review 1H13 Financial Review Going Forward Appendix
Slide 3: We are…
We are… Operating in one of the world’s most dynamic and exciting markets A gateway to Turkey, Pakistan, Central Asia and The Middle East Serving more than 360 million people; Shareholder Structure 60% of our population is below 30 years of age 2004-2012 CAGR: Sales volume: 15% Net Sales: 19%
Slide 4: …capitalizing on favorable demand and demographic drivers…
…capitalizing on favorable demand and demographic drivers… Per Cap Consumption in Liters (2012) Median Age CCI territory total population: over 360 million Source: CCI and United Nations 4
Slide 5: …allowing us to expand succesfully…
…allowing us to expand succesfully… # of Countries 318 mn UC 850 mn UC 10 S.Iraq - 2012 1 Pakistan - 2008 2004 2012 Syria - 2007 Population Served N. Iraq - 2006 (mn) 360 71 275 mn UC 2004 2012 Operating Plants 22 5 2004 2005 2012 2004 2012 5
Slide 6: …diversifying across geographies and categories.
…diversifying across geographies and categories. Volume split (uc) - Geography Revenue Split Int'l Int'l 33% 33% Turkey Turkey 67% 67% 2005 2012 2005 2012 Volume split (uc) - Category EBITDA Split Tea Int'l 8% 15% Int'l Still 37% 22% Sparkling 70% Turkey Turkey 85% 63% 2005 2012 2005 2012 6
Slide 7: Our operating model entails…
Our operating model entails… Management of diversity Local relevance Empowerment Local accountability Leverage technology for customer service 7 7
Slide 8: …so that we inspire consumers, customers and people…
…so that we inspire consumers, customers and people… Consumers Fulfillment Innovation Customers R elationship Serve Trust HIGH-PERFORMANCE People EMPOWERMENT 8 2012 ALIGNMENT 2020
Slide 9: …and enjoy strong positions in key markets.
…and enjoy strong positions in key markets. Turkey * Pakistan Kazakhstan Azerbaijan 67% 29% 42% 59% #1 #2 #1 #1 25% 2% 19% 13% #1 #8 #1 #2 7% 10% 8% 50% #3 #3 #3 #1 Source: Nielsen * Market share numbers are restated due to a change in forecasting universe 9
Slide 10: Business Overview & Strategy
Business Overview & Strategy 1H13 Operational Review 1H13 Financial Review Going Forward Appendix
Slide 11: Volume up by 18% in 1H13
Volume up by 18% in 1H13 Turkey Volume International Volume Consolidated Volume (Unit cases in millions) (Unit cases in millions) (Unit cases in millions) 268.3 282.0 517.0 437.5 235.0 169.3 1H12 1H13 1H12 1H13 1H12 1H13 Consolidated up by 17.1% to 319.2 million uc 2Q13 Turkey up by 3.5% to 165.9 mi
Slide 12: 1H13 Sales Volume Breakdown
1H13 Sales Volume Breakdown Volume split (uc) - Volume split (uc) - Geography Category 1H13 1H13 Tea 8% Still Turkey Int. 20% 55% 45% Sparkling 72% 12
Slide 13: Turkey - 1H13 Product introductions
Turkey - 1H13 Product introductions Coca-Cola, Coca-Cola Light, Fanta Coca-Cola Zero, Fanta, Sprite, Tangerine Fanta Peach Net revenue per case up 6% Can 250 ml Apple 1.5lt 200 ml. Sparkling and still category continued to grow in 1H13 Focus on IC packages Sprite 1.5lt Sensun Cappy Lemonade Cappy Li
Slide 14: International Operations - 1H13 Product introductions
International Operations - 1H13 introductions Improving market place Product execution Kazakhstan Jordan Central Asia +%37% Coca-Cola Can 355 Bonaqua Pet 500ml,1 L,1.5L ml Strong local marketing campaigns Increased market penetration Coke studio now in Iraq and Jordan Promotions Pakistan +17%
Slide 15: International Operations
International Operations International Volume Split 1H13 Kazakhstan 18.0% Kyrgyzstan 2.8% Pakistan 43.8% Azerbaijan Kazakhstan 7.9% +%33% Turkmenistan 4.7% Azerbaijan Tajikistan 0.5% +11% Jordan Syria Iraq 0.0% 19.5% 2.8% 1H12 Kazakhstan 19.2% Iraq +234% Kyrgyzstan 3.2% Pakistan 50.0% Azerbaijan Pak
Slide 16: Business Overview & Strategy
Business Overview & Strategy 1H13 Operational Review 1H13 Financial Review Going Forward Appendix
Slide 17: Net sales up by 20.3% in 1H13-Proforma
Net sales up by 20.3% in 1H13-Proforma Turkey Net Sales International Net Sales Consolidated Net Sales (TL in millions) (US$ in millions) (TL in millions) 2,491.0 1,294.1 1,442.0 581.7 2,071.5 437.4 1H12 1H13 1H12 1H13 1H12 1H13 Consolidated up by 17.9% to TL 1,573.7 million 2Q13 Turkey up by 8.7% t
Slide 18: EBITDA up by 25.9% in 1H13 - Proforma
EBITDA up by 25.9% in 1H13 - Proforma Turkey EBITDA International EBITDA Consolidated EBITDA (TL in millions) 17.5% (US$ in millions) (TL in millions) 17.0% * 19.3% * 17.5% 16.7% Turkey EBITDA * 16.7% 436.5 112.2 251.7 220.4 346.8 73.2 1H12 1H13 1H12 1H13 1H12 1H13 Consolidated up by 16.1% to TL 306
Slide 19: Financial Expenses - Proforma
Financial Expenses - Proforma 1H13 1H12 Interest income 16.1 13.6 Interest expense (-) (41.1) (32.8) Foreign exchange gain / (loss) 23.1 (24.2) Realized FX gain / (loss) - Borrowings (0.1) (0.0) Unrealized FX gain / (loss) - Borrowings (100.3) 48.7 Gain / (loss) on derivative transactions 0.0 0.0 Fi
Slide 20: Debt Structure - Proforma
Debt Structure - Proforma 1H13 FY12 Change% USD denominated* 956 852 12% EURO denominated* 46 51 -10% TL denominated 83 35 138% Other (in USD terms) 35 84 -58% Total Financial Debt in TL 2,107 1,822 16% Total Cash & Equivalent in TL 636 608 5% Net Debt in TL 1,471 1,215 21% Net Debt in US$ 764 681 1
Slide 21: Business Overview & Strategy
Business Overview & Strategy 1H13 Operational Review 1H13 Financial Review Going Forward Appendix
Slide 22: Going Forward
Going Forward Accelerate revenue and margins in International, focus on Iraq and Pakistan Grow the sparkling category and per caps in Turkey Improve Balance Sheet health every year Continue to build and enhance our reputation Build a world class organization EBITDA Growth>Net Revenue Growth>Volume G
Slide 23: 2013 Guidance
2013 Guidance Consolidated volume is to grow Turkey volume up at low to mid single digit growth Int’l volume up at mid to high teens (organic basis) Net revenue growth > volume growth EBITDA growth ≥ Net revenue growth 23
Slide 24: Appendix
Appendix Financial Statements 2012 Financial Leverage 2012 Corporate Structure Country Data Building a Sustainable Growth Business Turkey AFB Market Tea Market Segments in Turkey Trade Structure in Turkey
Slide 25: Introduction to Financial Statements
Introduction to Financial Statements Basis of Preparation Consolidated / TL/$ TL/$ International Turkey Year-End Average Functional TL USD December 31, December 31, Currency 2012 1.7826 2012 1.7922 Reporting December 31, December 31, TL USD Currency 2011 1.8889 2011 1.6708 Presentation ∆ -5.6% ∆ 7.3
Slide 26: Income Statement - Consolidated
Income Statement - Consolidated (TL mn) 2012 2011 Change % Volume (m/uc) 850.5 761.7 11.7% Net Sales 4,132.4 3,408.6 21.2% COGS (2,543.9) (2,145.8) 18.6% Gross Profit 1,588.5 1,262.8 25.8% OPEX (1,113.1) (939.9) 18.4% Other Inc/Exp (Net) (1.2) 5.4 (121.8%) EBIT 474.2 328.3 44.4% EBIT (exc. other) 47
Slide 27: Income Statement - Turkey
Income Statement - Turkey (TL mn) 2012 2011 Change % Volume (m/uc) 568.5 546.8 4.0% Net Sales 2,757.6 2,472.8 11.5% COGS (1,604.6) (1,476.1) 8.7% Gross Profit 1,152.9 996.7 15.7% OPEX (852.5) (752.2) 13.3% Other Inc/Exp (Net) 10.8 23.5 (54.3%) EBIT 311.2 267.9 16.2% EBIT (exc. other) 300.4 244.4 22.
Slide 28: Income Statement - International
Income Statement - International (USD mn) 2012 2011 Change % Volume (m/uc) 282.0 215.0 31.2% Net Sales 770.6 576.2 33.7% COGS (528.0) (417.1) 26.6% Gross Profit 242.7 159.2 52.4% OPEX (150.4) (115.4) 30.3% Other Inc/Exp (Net) 1.8 1.6 8.7% EBIT 94.0 45.4 107.1% EBIT (exc. other) 92.2 43.8 110.7% Inco
Slide 29: Balance Sheet – FY12/FY11
Balance Sheet – FY12/FY11 December December 31, December December 31, 2011 (TL million) 31, 2012 2012 31, 2011 (TL million) (audited) (audited) (audited) (audited) Cash & Cash Equivalents 489.9 522.2 ST Borrowings 229.3 125.4 Investments in Securities 118.0 3.8 Trade Payables 184.4 185.9 Trade Recei
Slide 30: Free Cash Flow
Free Cash Flow (TL mn) 2012 2011 Cash Flow From Operating Activities Net Income Adj for Non-Cash Items 696.8 533.5 Interest Paid (53.9) (51.8) Interest Received 31.5 31.4 Taxes Paid (102.1) (30.0) Employee Termination Benefits, (40.2) (33.8) Vacation Pay, Mngmt Bonus Operating Cash Flow 532.1 449.2
Slide 31: Financial Leverage and FCF
Financial Leverage and FCF Net Debt/EBITDA Capex/Net Sales (Excluding – acquisitions) 2.3x 14.0% 14.6% 1.6x FY11 FY12 FY11 FY12 14.6% FCF ROIC (Excluding – acquisitions) (TL million) 11.3% (mn TL) 154 9.6% FY11 (mn TL) FY12 FY11 FY12 (212) 31
Slide 32: Corporate Structure
Corporate Structure Coca-Cola İçecek A.Ş. 100.00% Tonus Turkish-Kazakh Joint 99.23% Venture L.L.P, CCI International Holland B.V. Coca-Cola Satış ve Dağıtım The Netherlands 99.96% Kazakhstan A.Ş., Turkey J.V. Coca-Cola Almaty Bottlers 51.23% L.L.P., Kazakhstan 48.77% Mahmudiye Kaynak Suyu 100.00%* 9
Slide 33: Country Data
Country Data % of Per capita CCI’s market Population GDP per capita CCI’s 2012 population consumption of share in (mn) in 2012 in 2012 Volume below 30 sparkling bev. sparkling bev. (2) ($) (2) Breakdown years (3) (L) in 2012 (4) in 2012 (5) Turkey 75.6(1) 51% 15,029 45 67% 66.8% Pakistan 181.1 64% 2
Slide 34: Building a Sustainable Growth Business
Building a Sustainable Growth Business CCI Turkey CCI Ankara Plant Best Country Bottling Operation at Quality Achievement Reward at 2009 TCCC EAG President’s 2011 TCCC EAG National Quality Environment Awards Awards Water usage ratio Energy usage ratio (lt water/lt product) (MJ lt of product) 2005 20
Slide 35: Turkey AFB Market
Turkey AFB Market AFB Market (exc. milk) RTD AFB Market (exc. milk) 5.5 billion uc 1.5 billion uc Tea Sparkling Water Other 44.4% 6.7% 2.9% Sparkling Ayran Beverages Powder&Concentrate 9.9% 1.6% 38.7% RTD AFB 28.2% Hot Coffee Fruit Juices&Still 2.4% Drinks HOD 10.2% 23.4% Bottled Water 31.5% Source:
Slide 36: Tea Market Segments in Turkey
Tea Market Segments in Turkey Volume Value * 3.2 bn uc 0.9 bn $ Teapotbag Teabag Teabag Teapotbag 4.8% 1.4% 5.3% 8.4% Loose Loose 93.8% 86.3% Source: Nielsen, 2012 Source: Nielsen, 2012 Very high levels of hot tea consumption • Has the highest share of throat after tap water • 95% of Turkish people
Slide 37: Trade Structure in Turkey
Trade Structure in Turkey Retail Volume by Channel (2012) Other 0% Gas Station 2% Hypermarket 2% Discount Store 5% On Premise 21% Traditional Grocery 47% Supermarket 23% Half of volume delivered by traditional trade channels Highest retail coverage among all FMCG categories in Turkey *Other includes
Slide 38: Glossary
Glossary AFB: Alcohol Free Beverages CAGR: Compound Annual Growth Rate CMB: Capital Markets Board of Turkey HOD: Home and Office delivery water OWB: One Way Bottle RTD: Ready-to-Drink Beverages UC: Unit Case (1 uc equals 5.678 liters) YTD: Year to Date Credit Rating Long Term Issuer Rating, ‘Baa3’,
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