Coca-cola Icecek A.s. · BIST:CCOLA
Coca-cola Icecek A.s — Investor Day (August 2024)
42 slides from Coca-cola Icecek A.s's investor day presentation, Aug 21, 2024
Slide 1: Capital Markets Day
Capital Markets Day 21.08.2024 CCI Auditorium INVESTOR PRESENTATION 1 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: Important Disclaimer
Important Disclaimer Based on the CMB's decision dated 28 December 2023 and numbered 81/1820 and the "Implementation Guide on Financial Reporting in High Inflation Economies" published by the POA with the announcement made on 23 November 2023, issuers and capital market institutions subject to finan
Slide 4: Karim Yahi, CEO
Karim Yahi CEO Experience Education Board Memberships Apr ’17 – Apr ’18 Coca-Cola Andina Sep’23 - Present Chief Executive Officer Mar’23 – Aug’23 Deputy Chief Executive Officer 1997 Masters, Audit July’21 – Feb’23 Chief Operating Officer at Fairlife Jan ’17 – Sep ’18 Arca Continental Jan’19 – Jul’21
Slide 5: 2024 FY Guidance
2024 FY GUIDANCE INVESTOR PRESENTATION 5 PUBLIC
Slide 6: Challenging Context
Challenging Context Purchasing Power and Consumer Confidence are Under Pressure Lingering Economic Challenges Tangible Pressure on Consumer On-going Conflict in the Middle East Life is 7x and 2.5x pricier in TR and PK, respectively vs ‘18 Consumer confidence index declining Türkiye 93 Türkiye 72,3%
Slide 7: Guidance
2024 From To Guidance Mid single-digit volume growth on a consolidated Sales Flat-to-Low single-digit volume growth on a basis: consolidated basis: Volume Revised • Mid-single digit growth in Türkiye ₺ • Low-to-Mid-single digit growth in Türkiye • Mid-single digit growth in international • Low-singl
Slide 8: Who We Are
WHO WE ARE INVESTOR PRESENTATION 8 PUBLIC
Slide 9: We are a Multinational Beverage Company…
1.5BN We are a Multinational UC Sales $4.2BN $762MN Revenue EBITDA Beverage Company… Volume Kazakhstan 12 ~600Million 10,000+ Countries People Employee Uzbekistan Kyrgyzstan Azerbaijan Turkmenistan Türkiye Tajikistan 2.08BN 33 3 Fruit UC Annual Syria Production Processing Production Iraq Plants Plan
Slide 10: …With a Diversified Country Portfolio Creating Natural Hedge
…With a Diversified Country Portfolio Creating Natural Hedge Oil Importers and Exporters Real GDP Growth < EM avg and > EM avg GDP Per Cap < EM avg and > EM avg Kazakhstan Kazakhstan Kazakhstan Azerbaijan Uzbekistan Kyrgyzstan Azerbaijan Uzbekistan Uzbekistan Kyrgyzstan Kyrgyzstan Azerbaijan Türkiye
Slide 11: What We Do
WHAT WE DO INVESTOR PRESENTATION 11 PUBLIC
Slide 12: We Have a Two-Pillar Growth Strategy
We Have a Two-Pillar Growth Strategy Balanced Organic Inorganic Growth Growth Grow Core New Categories & Countries Sharpen Expand Quality Growth Is Our North Star: EBIT > Revenue > Transaction > Volume INVESTOR PRESENTATION 12 PUBLIC
Slide 13: +$25BN NARTD Value Growth Opportunity…
+$25BN NARTD Value Growth Opportunity… Total NARTD Industry Industry Value Growth In CCI Countries +$25BN 14% CAGR $26.9BN (2023) 2023 - 2028E NARTD 27% SPARKLING 49% STILLS 11% WATER 5% Source: GlobalData (Industry Estimates); CCI&TCCC Assumptions (Category Shares), Currency Neutral * NARTD include
Slide 14: …With Strong Addressable Per Cap Consumption Growth Potential
…With Strong Addressable Per Cap Consumption Growth Potential Turkiye Pakistan Kazakhstan Iraq CCI Industry Non-Commercial CCI Industry Non-Commercial CCI Industry Non-Commercial CCI Industry Non-Commercial per cap per cap per cap per cap per cap per cap per cap per cap per cap per cap per cap per c
Slide 15: Our Markets Have a Low Penetration of Beverage Industry…
United States 1.606 Italy 1.300 Germany 1.233 Mexico 1.127 Belgium 1.109 Bulgaria 1.079 NARTD per cap* Poland 1.029 Spain 1.028 Saudi Arabia 959 Canada 949 France 932 Romania 900 Argentina 862 Chile 787 Japan 771 Kazakhstan 236 768 +14 United Kingdom 740 Thailand 734 Australia 685 Netherlands 641 So
Slide 16: …And Quality Growth Headroom with Mix Management Opportunities
…And Quality Growth Headroom with Mix Management Opportunities Category Mix Package Mix Channel Mix Diversify Increase the Win with Product Share of IC Customers Portfolio Packs PUBLIC INVESTOR PRESENTATION 16
Slide 17: 1. Opportunity to Diversify Product Portfolio
1. Opportunity to Diversify Product Portfolio Category Breakdown Share of No Calorie in 2006 Sparkling Volume (2023) Sparkling 29% Other 19% 10% 82% 11% 10% 10% 8% 2023 7% 15% 3% 3% 3% 2% 2% Sparkling 1% 1% Water Tajikistan Jordan Iraq Asia Pacific Azerbaijan Kazakhstan Pakistan America Latin Americ
Slide 18: 2. Small packages to support consumer recruitment
2. Small packages to support consumer recruitment IC Packages ~2X HIGHER NSR PER CASE1 ~1.5X GROSS MARGIN VS. FC1 Young Population in CCI Countries ~59% Share of Immediate Consumption (IC) Packages in Sparkling* (2023) Teen Recruitment Opportunity 54% 49% 40% 36% 27% 23% Asia North World Europe, Lat
Slide 19: 3. More Room to Create Growth and Value with Our Customers
3. More Room to Create Growth and Value with Our Customers Traditional 53% Volume Breakdown (2023) On-premise 19% Modern Retail 13% Discounter 5% Other: Vending Machines, 9% wholesalers etc. INVESTOR PRESENTATION 19 PUBLIC
Slide 20: How We Do It
HOW WE DO IT INVESTOR PRESENTATION 20 PUBLIC
Slide 21: CCI Playbook is Our Winning Formula
CCI Playbook is Our Winning Formula Invest Ahead • Production facilities • Coolers of Demand Develop & Deploy RTM Improvement & Talent Distributor Development • U30 program to recruit, train • Independent & loyal and develop future talents • Build capability & train • Women empowerment Digital distr
Slide 22: We Invest Ahead of Demand
We Invest Ahead of Demand Number of Plants & Production Capacity Capex Trend & Breakdown 6.3% on Total Number of Plants: 33 average Total Capacity: 2,079 million unit cases 8.1% 7.3% Kazakhstan 6.3% 6.0% 6.2% 6.1% 5.9% 3 4.6% 255M uc Uzbekistan 4 Kyrgyzstan Azerbaijan 188M uc 1 Türkiye 1 2016 2017 2
Slide 23: CCI’s Unique RTM Model
CCI’s Unique RTM Model RTM Systems in the World: 1. Direct Distribution by the 2. Wholesalers as a fulfillment 3. Hybrid approach – unique to Bottler intermediary CCI Distributor ~80% of volume • Independent & loyal • Local expertise and reach • CCI builds capability & train • Offers CCI’s best-in-c
Slide 24: Disciplined Revenue Growth Management
Disciplined Revenue Growth Management Net Sales Revenue = Volume x Price x Mix - Discounts Balance Opportunity Value-driven Terms & OBPPC Promo Spend Mapping Pricing Conditions Analyze: Identify & prioritize •Consumers’ Well defined pack Increase Optimize growth willingness to pay roles, optimal con
Slide 25: Our Uniqueness is to Develop our Markets and Create Value
Our Uniqueness is to Develop our Markets and Create Value +6% +81% +170bps 557 15.9% 524 14.2% TÜRKİYE 2.7 1.5 Consistent per cap growth 2018 2023 2018 2023* 2018 2023* Industry NARTD per cap $ NSR/uc EBITDA margin** Robust $ NSR/uc **Excluding others improvement PK: +5% KZ: +57% UZ: +29% +33% +400b
Slide 26: Sustainability 2030 Roadmap
Sustainability 2030 Roadmap Packaging Human Rights Commitment #1: Continue to make 100% of our packaging recyclable and Committment #7: Establish mechanisms to ensure that CCI’s distributors use at least 50% recycled material by 2030 and priority suppliers are %100 compliant with CCI Human Rights Po
Slide 27: Financial Review
FINANCIAL REVIEW INVESTOR PRESENTATION 27 PUBLIC
Slide 28: Erdi Kurşunoğlu, CFO
Erdi Kurşunoğlu CFO Experience Education 1993 Oct’23 - Present Chief Financial Officer BsC, Chemical Engineering Dec’21 – Oct‘23 Finance Director - Pakistan Sep’15 – Dec’21 1994 Chief Financial Officer - Africa Post-grad, International Management Dec’11 – Jul’15 Chief Financial Officer – Subsaharan
Slide 29: Summary Financials
Summary Financials Robust EBIT margin improvement y/y with & without TAS29 Net Sales EBIT Net Revenue (TL) (TL) Income (TL) 1H24 1H24 1H24 66.1 BILLION -2.7% y/y 10.4 BILLION -0.4% y/y 8.4 BILLION +5.1% y/y 15.7% MARGIN +37 bps 12.6% MARGIN +94 bps 2Q24 2Q24 2Q24 36.6 BILLION -6.9% y/y 6.9 BILLION -
Slide 30: Per UC Metrics
Nov 1, 2023 Per UC Metrics Without TAS 29, NSR/uc improved by 60.4% and 3.6% y/y in TL and USD terms, respectively Consolidated (TL) - TL, with TAS 29 Net Sales Revenue COGS EBIT per UC per UC per UC 87.8 84.9 83.4 58.6 81.1 57.6 53.4 15.6 15.3 50.2 13.1 13.0 2Q23 2Q24 1H23 1H24 2Q23 2Q24 1H23 1H24
Slide 31: Dynamic Hedging
Nov 1, 2023 Dynamic Hedging Securing long term visibility & controlled cost base COGS Breakdown Proactive Risk Management Policy Hedging & Pre-buy Rates Cost of Sales Sugar Aluminum Resin 20% OVERHEAD 2024 20% SUGAR 94%* 88% 98% 30% PACKAGING 6%** 2025 30% CONCENTRATE 40% 7% *100%, in markets where
Slide 32: 37bps EBIT margin improvement y/y
37bps EBIT margin improvement y/y Without TAS 29, EBIT up by 71.2% thanks to softer cost base and effective RGM initiatives -0.4% EBIT Development y/y (mTL) -42 million EBIT Margin 15.3% 15.7% 1,911 3,315 1,208 238 10,419 10,378 1H23 Price & Mix* Volume* COGS OpEx 1H24 EBIT EBIT (*) Volume & Mix imp
Slide 33: Disciplined Financial Management
Disciplined Financial Management Low leverage and strong liquidity maintained Debt & Cash Gross Debt Cash Net Debt Composition / EBITDA Other 10% 1.1x Other 31% 0.9x TRY 0.8x 21% $1.4B $777M 0.6x USD USD EUR 62% TRY 65% 4% 7% 21 22 23 2Q24 FX Position Debt $605m 316 Maturity $507m -947 43% 284 36% $
Slide 34: Continuous Focus on Improving Working Capital Efficiency
Continuous Focus on Improving Working Capital Efficiency Net Working Capital / NSR, Year End 7.4% Inventory optimization 5.7% 4.5% 4.3% Strict Receivable Management 3.6% 2.7% 1.7% Leveraging Payables -0.3% 2016 2017 2018 2019 2020 2021 2022* 2023* * With TAS 29 INVESTOR PRESENTATION 34 PUBLIC
Slide 35: Disciplined Capital Allocation
Disciplined Capital Allocation 1 3 Optimum CapEx • Capacity Expansion Debt Repayment • Solid balance Allocation • Cooler placements sheet Organic CapEx/Sales • Maintenance Optimum debt • Improving Growth ~6.1% (2023) Deleveraging repayment leverage metrics 2 4 Selective M&A • Strategic fit Dividends
Slide 36: CCI’s Financial Playbook
CCI’s Financial Playbook Right Pricing & Effective Record-high per uc efficiency Prudent OpEx Governance Mix Management NSR/uc Opex/NSR EBIT/uc USD USD 2,60 0,45 2,50 26.3% 2,43 25.3% 25.9% 23.8% 24.8% 0,30 0,31 22.4% 0,28 2,15 0,26 0,26 2,05 21.3% 20.4% 0,22 1,97 19.5% 0,20 0,19 0,20 0,18 1,89 1,80
Slide 37: Closing Remarks
CLOSING REMARKS INVESTOR PRESENTATION 38 PUBLIC
Slide 38: Consumer Opportunity
CONSUMER OPPORTUNITY NON-CCI CONSUMER CCI CONSUMER
Slide 39: We Will Continue to Create Sustainable Value as We Did in the Past
We Will Continue to Create Sustainable Value as We Did in the Past 2005 2006-2007 2008 2012 2021 2023 2024 Single Country Central Asia & Pakistan JV South Iraq Uzbekistan Pakistan fully owned Bangladesh North Iraq 2006 - 2023 Evolution EBITDA Net Sales Revenue Transactions Volume CAPEX/NSR 71X 55X 6
Slide 40: Country Data 2023
Country Data 2023 GDP per cap, Per capita NARTD CCI’s Market Capacity Population CCI’s Market Share Capacity PPP consumption Position Utilization (mn)(1) in Sparkling (%)(4) (mn UC)(6) (USD 000)(2) (8 ounce servings)(3) in Sparkling(5) Rate(6) Türkiye 85.8 34.8 557 64.7 1 689 81% Pakistan 240.5 5.5
Slide 41: Subsidiaries
Subsidiaries Coca-Cola İçecek A.Ş. %100.00 %100.00 %80.00 %99.97 CCI International Waha Beverages Holland B.V., Holland B.V., Holland Anadolu Efes Biracılık Coca-Cola Satış ve Dağıtım ve Malt Sanayii A.Ş. Coca-Cola Almaty Bottlers A.Ş., Turkey %51.23 %48.77 %100.00 LLP, Kazakhstan AEP Anadolu Etap P
Slide 42: Investor Presentation
Investor Presentation For more information, please contact cci-ir@cci.com.tr. INVESTOR PRESENTATION 56 PUBLIC