Coca-Cola Icecek A.S. · BIST:CCOLA
Coca-Cola Icecek A.S — BofA Merrill Lynch Equity 1-1 Conference (April 2016)
34 slides from Coca-Cola Icecek A.S's conference presentation, April 2016
Slide 1: 2015 Review & Turkish 2016 Outlook
2015 Review & Turkish 2016 Outlook BofA Merrill Lynch Equity 1-1 Conference
Slide 2: Agenda
1 CCI at a Glance 2 Near Term Strategic Priorities 3 2015 Review 4 2016 Expectations & Long Term Prospects 2
Slide 3: A regional powerhouse
A regional powerhouse 5th largest bottler 1.2 billion UC sales volume 10 countries 28 billion annual servings to 25 plants 380 million people 10 thousand employees 2 billion of investment 6* billion annual revenue in the past 10 years 1* billion annual EBITDA Annual production capacity of Public 1.4
Slide 4: Operating in the high growth markets
Operating in the high growth markets Coca-Cola HBC Coca-Cola Bottler Merger* Volume: 2.0 bn uc Volume: n.a. Revenue: USD 8.7 bn Revenue: USD 12.4 bn KO Volume Growth Average (2010-2014) Coca-Cola Icecek Volume: 1.1 bn uc 9% Revenue: USD 2.7 bn 5% 4% 0% -1% Coca-Cola Femsa Eurasia & Pasific Latin Nor
Slide 5: Opportunities ahead
Opportunities ahead 380 MILLION 70 MILLION CONSUMERS NEW CONSUMERS BY 2025 48 million new urban population More than 56% will be below 30 2016-2025 Population GDP 1.7% 6.7% Average CCI Growth EU Growth 0.1% 3.7% Source: UN Population Division, IMF 5
Slide 6: Sparkling beverage consumption vs GDP
Sparkling beverage consumption vs GDP Per cap 180 consumption (liters) (2014) 150 Mexico USA Argentina Germany 120 Brazil 90 UK Spain South Africa Saudi Arabia Bulgaria 60 Hungary Oman Poland Jordan Iraq Turkey Greece Turkmenistan Russia Kazakhstan Italy 30 Kyrgyzstan Egypt Pakistan Azerbaijan Tajik
Slide 7: Strong brand portfolio
Strong brand portfolio BRAND & FLAVOR EXPANSION PACKAGE INNOVATION 2006 2015 Differentiated package segmentation across channels, customers & Brands 17 30 consumers Flavors 44 148 7
Slide 8: Strong market positions in sparkling
Strong market positions in sparkling Turkey Kazakhstan Pakistan Iraq 66% 49% 36% 29% 8
Slide 9: Our strategic priorities
1) am 2 | ‘i I alg Foe ¢ Winning At The Point of Sales tee 1 , @Beayaim © * Sales Force Effectiveness - SFE Bn HW Ba == 1 * Revenue Growth Management - OBPPC A
Slide 10: Accelerate revenue and margin growth
Accelerate revenue and margin growth Revenue Growth Management Cold Occasion availability Brand Package 65% Price +6 pp vs. Channel PY IC mix in Focus on IC portfolio transactions 27% si +155% +6pp in in 2010-2015 2010-2015 10
Slide 11: Accelerate revenue and margin growth: technology for OpEx
Accelerate revenue and margin growth Leverage technology for better OpEx Management Route to Market Optimization My Cooler CCI Voyage Up to 20% saving (km) Tracing location of 800k coolers Real time volume tracking at 1100 distributors, 740k points of sale 11
Slide 12: Accelerate revenue and margin growth: Sales Force Effectiveness
Accelerate revenue and margin growth Sales Force Effectiveness for better OpEx Management SFE RED 2014 2015 Time in Field 57% 78% 82% 40% Strike Rate 55% 62% Call 9 out of 11 ~40% outlet Completion 75% 85% countries(1) coverage A disciplined total system process to support front-line salesforce effo
Slide 13: Grow sparkling category and per caps
Grow sparkling category and per caps AVAILABILITY AFFORDABILITY ACCEPTABILITY ACTIVATION Brand Love 55% BLS Score ~55% numeric Affordable entry pack 4 out of 10 countries +400 Customer tailored availability within availability in 10 rank the best, 3 rank campains 740k outlets countries the 2nd best
Slide 14: Continue to build and enhance our reputation
Continue to build and enhance our reputation Leader in Transparency Leader in the System 1st & only company in UNGC Index Best in the TCCC EAG twice Euronext Vigeo-Emerging 70 Index 667 projects in all CCI countries BIST Sustainability Index EFQM savings of USD145mn so far CDP Global Water Program 3
Slide 15: World class organization
World class organization Capability Right Development Culture Leadership Right Development Workplace 15
Slide 16: In a very challenging year
In a very challenging year… Kazakh Tenge & Geopolitical Azerbaijan Manat concerns remain in Oil prices melts against USD Middle East down by 35% Turkish Lira Consumer 80 76 76 depreciates confidence 74 73 amidst hits record 66 66 elections lows in 2009 2010 2011 2012 2013 2014 2015 period Turkey 16
Slide 17: Volume growth continued
…volume growth continued Turkey Volume International Volume Consolidated Volume (Unit cases in millions) (Unit cases in millions) (Unit cases in millions) 1131 1152 578 593 553 559 2014 2015 2014 2015 2014 2015 17
Slide 18: Turkey volume shows a gradual recovery in 2015
Turkey volume shows a gradual recovery in 2015 Successful campaigns to support growth Number of transactions up by 6% Sparkling transactions up by 5% on the back of higher IC share IC share in sparkling exceeds 20% Still, including water, up by 10% Mid teens growth in water, mainly driven by package
Slide 19: Pakistan volume continues to grow
Pakistan volume continues to grow 6% volume growth in 2015 cycling 17% a year ago Coke has the highest brand love score in Pakistan +1 mn teen recruitment in 2015 Operational efficiencies of USD 18mn in 2015 Strong #2 in the sparkling category Numeric distribution up from 30% to 46% since 2010 A new
Slide 20: Central Asia volume contracts 4% in 2015
Central Asia volume contracts 4% in 2015 Weak consumer environment due to significant currency devaluation Kazakhstan volume down by 4% Double digit volume contraction in Azerbaijan Price increases and portfolio initiatives Enlarged portfolio for recruitment & home penetration Market share gains in
Slide 21: Middle East volume remains flat in 2015
Middle East volume remains flat in 2015 Total Iraq volume down by 2%, cycling 6% growth South Iraq volume down by 1% due to contraction in water North Iraq contracts 5% due the base impact 12% growth in Jordan, led by strong sparkling Market share gains in Jordan & South Iraq Penetration up to 58% f
Slide 22: 2016 Expectations
2016 Expectations Currency volatility IC transition in TR Low oil prices Competition in PK Pricing/ affordability in CA EM woes Geopolitical conflicts Lower capex & Positive FCF 22
Slide 23: Why CCI?
Why CCI? Market Dynamics Low per capita consumption High GDP growth and increasing disposable income Large population base with good demographics Limited substitutes for alcoholic beverages in Pakistan & Middle East High average temperatures CCI’s Strengths World’s greatest brands Successful track r
Slide 24: Appendix
Appendix • 9M15 Summary • Top Line Performance • Profitability • Financial Expenses • Financial Debt Profile • Free Cash Flow • Corporate Structure • Country Data • Brands & positions in key markets
Slide 25: 9M15 Summary
9M15 Summary 2.205 *EBITDA margin
Slide 26: Top Line Performance
Top Line Performance Consolidated 9M15 9M14 Δ% 3Q15 3Q14 Δ% Volume (m/uc) 939 933 0,6% 377 365 3,4% Net Revenue (TL mn) 5.450 4.903 11,2% 2.205 1.925 14.6% Net Revenue per UC (TL) 5,81 5,26 10,5% 5,85 5,28 10.8% Turkey Volume (m/uc) 477 480 (0,6%) 192 183 5,1% Net Revenue (TL mn) 2.697 2.531 6,6% 1.
Slide 27: Profitability
Profitability* Consolidated 9M14 9M15 Δ% 3Q14 3Q15 Δ% EBIT (TL mn) 642 670 4.2% 290 321 10.6% EBIT Margin 13.1% 12.3% 15.1% 14.6% EBITDA (TL mn) 884 941 6,5% 372 418 12.4% EBITDA Margin 18.0% 17.3% 19.3% 18.9% Turkey EBIT (TL mn) 270 317 17.7% 121 142 16.7% EBIT Margin 10.7% 11.8% 12.3% 13.4% EBITDA
Slide 28: Financial Expenses
Financial Expenses (TL million) 9M15 9M14 Interest income 25 31 Interest expense (-) (135) (112) Foreign exchange gain / (loss) 267 65 Realized FX gain / (loss) – Borrowings (10) (26) Unrealized FX gain / (loss) (626) (116) Gain / (loss) on derivative transactions (1) 3 Financial Income / (Expense)
Slide 29: Financial Debt Profile
Financial Debt Profile Financial debt (US$ million) Maturity (US$ million) 1.140 1.168 661 1% 2% 3% 13% 12% TL & JD & KT PKR 86% EUR 83% 102 94 104 120 USD 51 37 2014 9M15 2015 2016 2017 2018 2019 2020 2023 Net Debt (US$ million) Net Debt / EBITDA* 2,47x 1,96x 9M15 2014 Change 1,70x Total Financial
Slide 30: Free Cash Flow
Free Cash Flow Net Operating Cash Inc. Working Capital (TL Capex (TL mn) Free Cash Flow (TL mn) mn) 729 188 607 86 9M14 9M15 9M14 9M15 9M14 9M15 -419 -643
Slide 31: Corporate Structure
Corporate Structure Coca-Cola İçecek A.Ş. 100.00% Tonus Turkish-Kazakh Joint 100.00% Venture L.L.P, CCI International Holland B.V. Coca-Cola Satış ve Dağıtım The Netherlands 99.97% Kazakhstan A.Ş., Turkey J.V. Coca-Cola Almaty Bottlers 51.23% L.L.P., Kazakhstan 48.77% Mahmudiye Kaynak Suyu 100.00%*
Slide 32: Country Data
Country Data % of pop. GDP per Per cap cons CCI’s m.share CCI’s 2014 Pop. in 2014 below 30 cap. in of spark. bev. Country in spark. bev. Vol. (mln) (2) years 2014 in 2014 in 2014 (5) Breakdown (2) ($) (3) (L) (4) Turkey 77.7 (1) 49% (1) 19,556 41 66% 51.1% Pakistan 185.1 63% 4,746 19 36% 21.2% Kazak
Slide 33: Brands & positions in key markets
Brands & positions in key markets Sparkling 66%, #1 Juice 27%, #1 Water 6%, #2 Sparkling 36%, Juice 2%, #8 Water 8%, #3 #2 Sparkling 29%, #2 Energy Water Sparkling 50%, #1 Juice 8%, #5 Water 9%, #4
Slide 34: Ratings & Glossary
Ratings & Glossary Credit Rating Glossary Long Term Issuer Rating, ‘Baa3’, Stable Outlook AFB: Alcohol Free Beverages CAGR: Compound Annual Growth Rate (Moody’s rating, Apr 15, 2014) CMB: Capital Markets Board of Turkey HOD: Home and Office delivery water Foreign Currency Senior Unsecured rating and
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