Coca-cola Icecek A.s. · BIST:CCOLA
Coca-cola Icecek A.s — AK Investment Turkey Outlook Virtual Conference 2023
61 slides from Coca-cola Icecek A.s's conference presentation, May 4, 2023
Slide 1: Investor Presentation
INVESTOR PRESENTATION April 2023 PUBLIC
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: Overview of CCI
Overview Of CCI PUBLIC
Slide 4: Key Investment Highlights
Key Investment Highlights Excellent Great people and brand portfolio excellent execution that helps accelerating that we continue to innovate quality growth Vast potential of our Resilient business with operating markets proven track record that offer NARTD growth with expansion & growth opportunity
Slide 5: A Multinational Beverage Company
A Multinational Beverage Company… 11 ~430MN 30 146 ~896 1.6BN 1.9BN $3.2BN $610MN Countries People Production Lines Thousand UC Sales UC(1) Annual Revenue EBITDA Plants Sales Points Volume Production Capacity Volume Revenue EBITDA 14% 20% 28% 9% 38% 36% Kazakhstan 11% 12% 16% 72% 27% 17% Uzbekistan
Slide 6: With a Successful Track Record of Growth
… With a Successful Track Record of Growth Volume 10% 5x CAGR 2005 - 2022 Kazakhstan Revenue 25% 45x Azerbaijan CAGR Uzbekistan Kyrgyzstan 2005 - 2022 Turkey Turkmenistan Tajikistan 26% Syria Iraq EBITDA 52x Jordan CAGR Pakistan 2005 - 2022 318 MN UC 1,577 MN UC 2005 2006 - 2007 2008 2012 2021 2022
Slide 7: Resulting In a Rising Performance
Resulting In a Rising Performance Sustainable Growth y/y% Solid Free Cash Flow (TL million) y/y% 21,8% 21,3% 19,0% 18,9% 17,6% 16,2% +9.5% +22.0% 144% +82.0% VOLUME NSR EBITDA 116% EBITDA MARGIN +48.7% 52% +13.6% -0.3% 49% 36% 38% 26% 27% 18%17% 21% 19% 20% 13% 15% 16% 15% 6% 642642 729 729 1,081 2,
Slide 8: With The Right Focus
…With The Right Focus Right Right Price Mix • Regional Strategies • IC Portfolio Availability • Effective discount and • Optimum price/pack trade promotion management architecture NSR > PCE growth IC SHARE 31.7% in Turkey (FY22) Right Right Portfolio Channel • Portfolio expansion • Channel prioritiz
Slide 9: FY22 Financial Results
FY22 Financial Results PUBLIC
Slide 10: 4Q&FY22 in Review
4Q&FY22 in Review Creating Value with Sound Operational Performance and New Strategic Investments Operational Performance Financial Performance 4Q22 FY22 4Q22 FY22 Volume million million Net Sales billion billion (UC) 285 1,577 Revenue (TL) 12.8 53.5 +6.8% y/y +14.6% y/y +129.3% y/y +144.1% y/y 4Q22
Slide 11: Balanced Growth with Rich & Diversified Portfolio
Balanced Growth with Rich & Diversified Portfolio Double digit growth in both Sparkling & Stills Sparkling Stills Water y/y y/y y/y +15.5% +18.7% +4.5% Growth is led by categories and launches of strategic value to CCI New Category Coca-ColaTM Returnable Energy Iced Tea Coffee y/y Bottle y/y y/y (kg
Slide 12: Türkiye: Solid Topline Performance
Türkiye: Solid Topline Performance with Volume Momentum & Proactive RGM 38% Share of Volume in Total CCI Volume Net Sales EBIT Sparkling 4Q22 FY22 Performance Revenue (exc.other) mUC mTL mTL Growing +115.3% share of low +1.5% -0.4% +123.6% y/y y/y & no calories +2.8% Stills 4Q22 FY22 Momentum in ice
Slide 13: International: Across The Board Growth In All Key Markets
International: Across The Board Growth In All Key Markets 62% Share of Volume in Total CCI Volume Net Sales EBIT Sparkling 4Q22 FY22 Performance Revenue (exc.other) mUC mTL mTL Growing share of low +13.5% +25.3% y/y y/y & no calories +23.2% +148.5% +157.6% Stills 4Q22 FY22 Momentum in iced teas +41.
Slide 14: Key International Markets
Key International Markets Became Growth Drivers in FY22 Volume Share in CCI Volume 4Q22 FY22 Kazakhstan 12% (y/y) Sparkling in FY22 +20% +32.0% +16.0% Volume 4Q22 FY22 Uzbekistan 9% Quality Growh (y/y) +26.4% +32.1% Algotihm in Place in 2022 Volume 4Q22 FY22 Pakistan (y/y) 27% Sound Execution Despit
Slide 15: Positive Business Momentum and Strong Pricing Mitigate Cost Pressures
Positive Business Momentum and Strong Pricing Mitigate Cost Pressures 25000 EBIT Development (mTL) EBIT Margin Free Cash Flows (mTL) 20000 15000 15.0% 10000 15.7% 5000 0 EBIT 3,434 Volume 2,118 13,593 Price -10,572 COGS OPEX -3,014 FX 2,447 8,006 EBıt22 2,154 2.913 -1,753 -78 -718 111 2,629 FY21 Vol
Slide 16: Balance Sheet & Risk Management
Balance Sheet & Risk Management PUBLIC
Slide 17: Disciplined Financial Management
Disciplined Financial Management Preserving Cash and Securing Liquidity Debt Profile Cash Profile Net FX Position (mUSD) 1000 Total FX Cash: 562 900 145 OTHER 6% 800 OTHER 24% TRY 9% 700 600 417 EUR 7% 500 -949 $1.1b $790m 400 300 TRY 14% 200 353 100 -34 0 USD 78% USD 62% FX FX Debt Debt FX FXCash C
Slide 18: Proactive Hedging Increase Long Term Visibility
Proactive Hedging Increase Long Term Visibility Balanced Cost Base Proactive Risk Policy COST OF SALES 2023 HEDGING & PRE-BUY RATES SUGAR ALUMINIUM RESIN 20% Overhead 20% Sugar 30% Packaging 80% 90% 60% 30% Concentrate INVESTOR PRESENTATION 17 PUBLIC
Slide 19: 2023FY Guidance
2023FY Guidance PUBLIC
Slide 20: Guidance
2023 Guidance Mid to high single-digit volume growth on a consolidated basis SALES VOLUME Flat to mid-single digit in Turkey High single to low double-digit growth in the international operations NET SALES REVENUE The high 40s to low 50s percentage (*) Consolidated FX-neutral NSR growth FX-neutral b
Slide 21: Strategic Priorities
Strategic Priorities PUBLIC
Slide 22: Clear Strategic Framework
Clear Strategic Framework Our Vision Values Be the Best FMCG Company ACCOUNTABILITY PASSION TEAM WORK INTEGRITY Across our Markets ◊ Costumer oriented organization ◊ Holistic beverage Company ◊ Value creative customer solutions ◊ Commercial excellence ◊ Competitive service mindset ◊ Corporate govern
Slide 23: Strategic Priorities In Core Business to Create Value
Strategic Priorities In Core Business to Create Value Accelerate Be the Best Win with Digital for Win with “Quality” in FMCG Our People Industry Stakeholders Growth Execution Leadership • Revenue Growth • Win at the • Integrated • Digital • Creating Management Point of Sale Talent Strategy transform
Slide 24: Integrated Digital Model for Value Creation
Integrated Digital Model for Value Creation Customer and Consumer Asset Optimization People Experience Experience Balancing between digital and human touch. Optimized and Resilient Supply Chain Productivity Through Digitization, Commercial transformation with Digital RTM Upskill/Reskill Digital Cust
Slide 25: Growth Opportunities
Growth Opportunities PUBLIC
Slide 26: NARTD Value Growth Opportunity
NARTD Value Growth Opportunity INDUSTRY TOTAL NARTD INDUSTRY VALUE GROWTH IN CCI COUNTRIES: +$10BN 8% CAGR $21.4BN (2022) 2022 - 2027E NARTD 34% SPARKLING 56% STILLS 13% WATER 8% CCI VALUE SHARE OPPORTUNITY Source: GlobalData (Industry Estimates); CCI&TCCC Assumptions (Category Shares) * NARTD inclu
Slide 27: More Room to Growth: IC Packages
More Room to Growth… YOUNG POPULATION Share of Immediate IN CCI COUNTRIES Consumption (IC) ~59% Packages in Sparkling (FY22) 55% 48% 55 48 41% 41 39% Teen Recruitment 39 27% Opportunity! 27 21% 21 Asia North Europe, World Latin CCI1 Pacific Middle East Average America America & Africa IC Packages ~2
Slide 28: Lower Per Caps in CCI Countries
United States 1.447 Germany 1.196 Italy 1.118 Belgium 1.061 Mexico 1.029 Spain 982 France 945 NARTD per cap* Romania 935 Poland 909 Saudi Arabia 885 Canada 836 in CCI Countries Lower Per Caps Argentina 792 Chile 749 Kazakhstan 675 United Kingdom 665 Thailand 665 Australia 630 Netherlands 597 Japan 5
Slide 29: Significant per Cap Growth in Operating Geographies
Significant per Cap Growth in Operating Geographies CCI countries 8% 675 4% • NARTD per Cap grew 8% in 2022 in CCI countries 1% 538 • Between 2018-2022 (CAGR%): NARTD per Cap (2022) 527 12% 11% 2% 402 • CCI countries, ~6% 393 391 13% 327 • World-ex CCI, 1% 1% 232 • DM markets, flat 2% 1% 154 • EM ma
Slide 30: More Room To Diversify Product Portfolio
More Room To Diversify Product Portfolio Category Share of Low/No Breakdown Calorie in Sparkling Volume (2022) 27% 10% 18% 8% 2006 15% 10% 9% Sparkling 8% 7% 7% Other 4% 3% 3% 2% 1% 1% 2022 Tajikistan Jordan Azerbaijan Asia Pacific Iraq Kazakhstan Pakistan Latin Uzbekistan North Turkey America Ameri
Slide 31: Capital Allocation Policy
Capital Allocation Policy PUBLIC
Slide 32: Disciplined Capital Allocation
Disciplined Capital Allocation ORGANIC INORGANIC DELEVERAGING SHAREHOLDER GROWTH GROWTH RETURN Optimum CapEx Selective M&A Debt Allocation Strategy Repayment Dividends CapEx/Sales Bolt-on Optimum debt Sustainable ~6.2% (2022) acquisitions repayment dividend policy • Capacity • Strategic fit • Solid
Slide 33: Smart Capex Management
Smart Capex Management By Region By Category Turkey International 31% 7% 31% 69% Coolers Infastructure 30% Maintenance Digital 32% By Year 8,1% 7,3% 6,4% on average 5,9% 6,3% 6,0% 6,2% 4,6% 2016 2017 2018 2019 2020 2021 2022 INVESTOR PRESENTATION 31 PUBLIC
Slide 34: Pillars of Strong FCF: Improving Working Capital Efficiency
Pillars of Strong FCF Improving Working Capital Efficiency Net Working Capital/NSR* DSO DSI DPO Full Year 7.4% 2016 30 Days 47 Days 51 Days 5.7% 2017 29 Days 43 Days 57 Days 4.5% 4.3% 2018 27 Days 48 Days 64 Days 3.5% 2019 27 Days 50 Days 68 Days 2020 24 Days 42 Days 56 Days 1.7% 2021 26 Days 42 Day
Slide 35: Track Record of Improving Free Cash Flow Generation
Track record of Improving Free Cash Flow Generation Free Cash Flow and FCF Yield* 11.0% 11.8% 9.3% 9.6% 5.1% 7.6% 8.2% 2,629 EBITDA FCF Yield (%) -0.3% 0.1% 0.5% 2,153 Growth 1,967 Working Capital Efficiency 1,079 FCF (TLmn) 729 727 642 Prudent CapEx 46 10 -44 2013 2014 2015 2016 2017 2018 2019 2020
Slide 36: Consistent Dividend Pay Out
Consistent dividend pay out Dividend per Share CCI DIVIDEND DISTRIBUTION (TL per 100 shares) POLICY IS BASED ON: 1.4% Dividend Yield* NET 2.1% 2.83 DISTRIBUTABLE 2.7% INCOME 2.36 3.2% 1.97 FREE CASH 1.77 FLOW GENERATION 4.3% 2.1% 1.18 CAPEX AND OTHER FUNDING 0.79 0.3% 0.5% NEEDS FOR GROWTH 0.2 PREVA
Slide 37: Credit Rating
Credit Rating PUBLIC
Slide 38: Solid Credit Ratings
Solid Credit Ratings S&P GLOBAL FITCH Issuer Rating BB+ BBB- Outlook Negative Positive Last revision 23.09.2022 01.07.2022 • Leading market shares in growing markets • Resilient financial profile Strengths • Well-known brands • Strong operational profitability • Track record of profitable growth • W
Slide 39: ESG
ESG PUBLIC
Slide 40: Shareholder Structure & Composition of the Board of Directors
Shareholder Structure & Composition Of The Board of Directors Anadolu Efes Biracılık ve The Coca-Cola Özgörkey Free Float Malt Sanayi A.Ş. Export Corporation Holding A.Ş. and Other 50.3% 20.1% 1.4% 28.3% Composition 12 Members of BoD •12 of whom are non-executive •4 of whom are independent Note: AG
Slide 41: Subsidiary Structure
Subsidiary Structure * INVESTOR PRESENTATION 39 PUBLIC
Slide 42: CCI's Sustainability Journey
CCI’s Sustainability Journey Became the 1st company from Türkiye and within TCCS in the UNGC 100 Index Received the 1st ISO 14064-3 Certificate in Türkiye for Externally assured for ISAE its GHG inventory 3000 (for the 1st time) Listed among Carbon Listed as Türkiye’s 1st food Disclosure and Perform
Slide 43: ESG Organization in CCI
ESG Organization in CCI Board of Directors Corporate Audit Committee for Executive Committee Governance Committee Committee Early Detection of Risk Sustainability D&I Advisory Committee Committee Environment Social Governance Sustainable Diversity & Human Health & Ethics & Information Business Water
Slide 44: Our Focus & Sustainable Development Goals
Our Focus & Sustainable Development Goals INVESTOR PRESENTATION 42 PUBLIC
Slide 45: Sustainability 2030 Roadmap
Sustainability 2030 Roadmap PACKAGING 2030 SUSTAINABILITY ROADMAP HUMAN RIGHTS Commitment #1: Continue to make 100% of our packaging Committment #7: (Establish mechanisms to) Ensure recyclable and use at least 50% recycled material by 2030 that CCI’s distributors and priority suppliers are %100 comp
Slide 46: Environmental Footprint
Environmental Footprint ENERGY MANAGEMENT & CLIMATE PROTECTION Production Total Energy Usage Ratio (MJ/L) (2022) Transport & Distribution Cooling Practices TCCC “Route Optimization Project” By using cold drink Average: Road Net program reduced mileage travelled equipment with Energy 0,39 MJ/L 1.59 0
Slide 47: Water Management
Water Management SAVE & REDUCE REUSE REPLENISH Water Savings Across CCI (m3) We recycle We conduct Local Source Water Vulnerability and reuse Assessment (SVA) 2, 124,117 and develop 1, 838, 529 1,652,967 Water Management Plan (WMP) 1,548,905 1,420,312 Recycled and reused 985,785 234,741 m3 13 Leader
Slide 48: Sustainable Packaging
Sustainable Packaging POST-CONSUMER PACKAGING WASTE REDUCE REUSE RECYCLE RECYCLING Lightweight Practices Returnable Glass Bottles Our Packaging is already 100% Recyclable Post-Consumer Material Collection Implementing lightweight programs Glass bottles can be In 2022, we used 6% r-PET (recycled Cros
Slide 49: Community-1
Community-1 WOMEN YOUTH EMPOWERMENT EMPOWERMENT We have been a signatory to the UN Women’s Empowerment Principles (WEP) ~60% of the population in CCI geography is below 30 years of age since 2015 Investing in our geographical regions’ young and growing population is critical to the sustainable devel
Slide 50: Community-2
Community-2 WATER WASTE STEWARDSHIP MANAGEMENT FOCUS ON WATER STRESS AREAS Transition to a circular economy is a priority focus area We attach particular importance to water related issues Paani Safe WADA Tajdid Project Go Wasteless HORECA Pet Collection Water Initiative 44%* of the total population
Slide 51: Consumer Well-Being
Consumer Well-Being • Well-diversified product portfolio • Increasing focus on Low/No calorie • Expansion in Stills, Energy Drinks & Coffee • Innovation PASSED all food safety and quality audits in 2022 All CCI plants obtained Food Safety System Certification FSSC 22000 Standard INVESTOR PRESENTATIO
Slide 52: Customer Value
Customer Value Superior Execution Excellence in Supply Chain We are investing in developing our people Operational Excellence (OE) with the and technologies to provide the best experience for our business partners; Best Customer long-term intention of meticulously improving our business processes cu
Slide 53: People First
People First Human Rights integrated to our practice affecting various stakeholders Human Rights Policy Supplier Guiding Principles Human rights trainings in Supplier Guiding Principles (SGP) determine the social, environmental, ethical and economic minimums TCCS expect CCI launched its first Human
Slide 54: Human Rights
Human Rights Diversity and Inclusion Health and Safety Diversity and Inclusion Health and safety issues managed through Advisory Board the Coca-Cola Operating Requirements (KORE) In order to strengthen our periodic controls, CCI Diversity and Inclusion Manifesto we have been carrying out Hand-in-Han
Slide 55: Human Capital
Human Capital Talent Management • CCI Talent Management Principles • My Career Platform • CCI Career Navigation Framework • Talent Readiness Index (TRI) improvement Talent Acquisition • ‘’CCI Next Talent’’ Internship Program In Turkey, Kazakhstan, Pakistan and Kyrgyzstan, 100 Next Talents continue t
Slide 56: Proactive in Transparency and Accountability
Proactive in Transparancy and Accountability Inclusion in leading Recognition & Continuous ESG Indices Awards Commitment INVESTOR PRESENTATION 54 PUBLIC
Slide 57: Appendix
Appendix PUBLIC
Slide 58: Country Data
Country Data 2022 GDP per cap, Per capita NARTD CCI’s Capacity Population CCI’s Market Position Capacity PPP consumption Market Share Utilization (mn)(1) in Sparkling(5) (mn UC) (USD 000)(2) (8 ounce servings)(3) in Sparkling (%)(4) Rate(6) Türkiye 85.3 31.8 527 66 1 723 82% Pakistan 235.8 5.2 126 5
Slide 59: Back-up Community Snapshot
Back-up Community Snapshot PROJECT TYPE PROJECTS COUNTRIES YOUTH • 3.2.1. Move • Turkey, Kazakhstan EMPOWERMENT • Coca Cola Belestery • Kazakhstan • Olympic Moves Program • Azerbaijan • Coca Cola Grassroots Football Tournament • Azerbaijan • New Generation Project • Azerbaijan WOMEN • My Sister Prog
Slide 60: Category Performance 4Q22
Category Performance Sales Sales -10.9% +4.5% Water Water 9% 10% Stills 10% Stills 8% +21.5% 4Q22 +18.7% 2022 81% 82% Sparkling Sparkling +7.8% with +16.6% +15.5% with +17.9% INVESTOR PRESENTATION 58 PUBLIC
Slide 61: Investor Presentation
INVESTOR PRESENTATION April, 2023 For more information, please contact cci-ir@cci.com.tr. PUBLIC
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