28 slides from Anadolu Efes Biracilik Ve Malt Sanayii A.s's earnings presentation, May 5, 2016
Slide 1: Beer Operations 1Q2016 Results Conference Call
May 5, 2016 BEER OPERATIONS 1Q2016 RESULTS CONFERENCE CALL ROBIN GOETZSCHE - BEER GROUP PRESIDENT & CEO ONUR ÇEVİKEL - CFO
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation may contain certain forward-looking statements concerning our future performance and should be considered as good faith estimates made by the Company. These forward-looking statements reflect management expectations and are based upon currently available
Slide 3: General Overview & Operating Performance
ROBIN GOETZSCHE- BEER GROUP PRESIDENT & CEO GENERAL OVERVIEW & OPERATING PERFORMANCE 3
Slide 4: 1Q2016 Key Highlights on Consolidated Performance
1Q2016 Key Highlights on Consolidated Performance Volume & revenue mostly in line with guidance; Sales volume reported at 16.5mhl Revenue performed better than volume Flattish net sales revenue at TL1,933.2 mn EBITDA (BNRI) margin was 13.1% with a limited 127bps decline, thanks to; Continued
Slide 5: Consolidated Performance – 1Q2016
Consolidated Performance – 1Q2016 SALES VOLUME NET SALES REVENUE EBITDA (BNRI)* 14.3% (3.2%) 0.1% 13.1% (2.2%) excl. Ukraine 0.8% excl. Ukraine (8.7%) (8.2%) excl. Ukraine mn TRL mn TRL mhl 1,931.0 1,933.2 17.1 16.5 277.1 252.9 1Q2015 1Q2016 1Q2015 1Q2016 1Q2015 1Q2016 Numbers may not add up to 100%
Slide 6: Soft Drinks Volume Development
Soft Drinks Volume Development VOLUME BREAKDOWN 218.4 1.5% 221.8 Kazakhstan Other 9% 7% Iraq 9% 2.0% 103.9 105.9 mu/c Pakistan 23% 1.1% Turkey 114.5 115.8 52% 1Q2015 1Q2016 Turkey International Total Turkey delivered low single-digit volume growth, while transaction numbers increased by 9.5%, outp
Slide 7: Beer Volume Development
Beer Volume Development 4.7 (15.7%) 4.0 Total beer group sales volume in line 1.5 with expectations; (18.6%) 1.2 Outperformance of expectations in mhl 3.2 (14.4%) Russia & Kazakhstan balanced 2.7 softer volumes in Turkey 1Q2015 1Q2016 International Beer Turkey Beer Total Turkey Beer Social unrest
Slide 8: Turkey Beer Operations
Turkey Beer Operations New launches including; SALES VOLUME (18.6%) Efes Pilsen Long Neck RB Efes Xtra RB 1.5 mhl 1.2 Amsterdam Navigator Shot 55cl Efes Pilsen Color Series 1Q2015 1Q2016 Market investments continued RB: Returnable Bottle Volume Share - Turkey 0.1% 31.8% 68.1% Efes TURKEY Tub
Slide 9: International Beer Operations
International Beer Operations (14.4%) (9.4%) excl. Ukraine 3.2 mhl 2.7 1Q2015 1Q2016 Net sales revenue per liter grew by 15% on constant currency basis Margins improved significantly, helped by; • Stock carry-over in 1Q2016 • Positive mix • Continued cost savings • Effective hedging • Opex efficienc
Slide 10: Russia
Russia Market share intact in 1Q2016 vs 4Q2015 where the market declined less than expected Improved mix with growth in higher margin brands Number of key brand extensions & launches to ensure the continued growth of key brands New initiatives to become more competitive in certain segments to gain m
Slide 11: Beer Group Strategy
RANDS XECUTION FFICIENCY ELATIONS wy
Slide 12: Financial Overview
ONUR ÇEVİKEL - CFO FINANCIAL OVERVIEW
Slide 13: Consolidated Performance – 1Q2016
Consolidated Performance – 1Q2016 (million TL) 1Q2015 1Q2016 Change % Volume (mhl) 17.1 16.5 -3.2% Net Sales 1,931.0 1,933.2 0.1% Gross Profit 788.8 732.0 -7.2% EBIT (BNRI) 85.5 47.0 -45.0% EBITDA (BNRI) 277.1 252.9 -8.7% Net Income -212.0 60.3 128.4% Margins Change (bps) Gross Profit 40.8% 37.9% -2
Slide 14: Beer Group Performance – 1Q2016
Beer Group Performance – 1Q2016 Turkey Beer International Beer Beer Group (mn TL) (mn USD) (mn TL) 1Q2016 vs 1Q2015 1Q2016 vs 1Q2015 1Q2016 vs 1Q2015 Volume (mhl) 1.2 -18.6% 2.7 -14.4% 4.0 -15.7% Net Sales 283.4 -16.6% 116.9 -25.4% 632.0 -13.2% Gross Profit 157.4 -25.6% 52.7 -21.9% 315.4 -16.8% EBIT
Slide 15: Beer Group Free Cash Flow
Beer Group Free Cash Flow Beer Group Free Cash Flow (mn TRL) 1Q2015 1Q2016 EBITDA 111.2 96.3 Change in Working Capital -71.7 -66.7 Income Taxes & Employee Benefits Paid -15.6 -15.4 CAPEX, net -55.5 -63.9 Net Financial Income /(Expense) 16.3 -1.4 FCF -15.4 -51.1 Other investing activities (Acq., Disp
Slide 16: Balance Sheet Flexibility: Net Leverage Ratio
Balance Sheet Flexibility 1Q 2016 Net Leverage Ratios are within comfortable area. Anadolu Efes Consolidated Net Debt / EBITDA (BNRI) Beer Group Net Leverage Ratio 2.05 1.98 2.04 1.67 1.55 1.57 times times 1Q 2015 2015 YE 1Q2016 1Q 2015 2015 YE 1Q2016 AEFES 1Q2015 1Q2016 BEER 1Q2015 1Q2016 TOTAL FIN
Slide 17: Maturity Schedule
Borrowing Mix & Liquidity Profile Easily manageable debt repayment schedule Average maturity of debt for; Beer Group is app. 5.2 years and Anadolu Efes is app. 3.7 years 709 652 Schedule Maturity 500 500 206 138 153 120 120 118 110 68 82 57 36 37 37 43 2016 2017 2018 2019 2020 2021 2022 2023 Beer Gr
Slide 18: Interest Breakdown
Interest Breakdown Significant portion of debt is fixed, minimized interest rate risk Anadolu Efes Beer Group 1Q2015 1Q2016 1Q2015 1Q2016 23% 29% 25% 31% 71% 69% 75% 77% Fixed Floating 18
Slide 19: Financial Income/Expense Breakdown
Financial Income/Expense Breakdown An adolu Efes Con s olidated - Fin an cial I n come / (Ex pen s e) Breakdow n 1 Q2 0 1 5 1 Q2 0 1 6 (million TL ) Interest income 23.6 19.5 Interest expense -55.0 -52.2 Foreign exchange gain /(loss) -355.1 81.2 Other financial expenses (net) -3.9 -4.6 Fain/(loss) o
Slide 20: Anadolu Efes Consolidated Free Cash Flow
Anadolu Efes Consolidated Free Cash Flow AEFES Free Cash Flow (million TL) 1 Q2 0 1 5 1 Q2 0 1 6 EBITDA 272.2 251.4 Change in Working Capital -241.0 -82.0 Income Taxes & Employee Benefits Paid -34.8 -27.5 CAPEX, net -275.4 -203.3 Net Financial Income /(Expense) 122.5 -7.6 FCF -156.5 -68.9 Other inve
Slide 21: Financial Priorities
Financial Priorities Sustain consolidated cash flows through; o focus on working capital optimization o optimized capex policy o stick to tight balance sheet management Deleveraging Efficiency improvements via savings Manage impact of F/X volatility on operations Commitment to Investment Grade Ratin
Slide 22: Closing Remarks
ROBIN GOETZSCHE BEER GROUP PRESIDENT & CEO CLOSING REMARKS
Slide 23: Long Term Key Priorities
Long Term Key Priorities Continue to generate value by margin improvement and FCF generation through our priorities; o capitalizing on our strong brand portfolios o to achieve optimal brand & SKU mix o excelling in execution o focus on quality market share o strong cash flow generation with special
Slide 24: 2016 Guidance
2016 Guidance Turkey beer market decline low-single digit* Efes Turkey volume flattish* BEER GROUP Russian beer market decline parallel to the decline in 2015* EFES RUS volume outperform the market Total beer volume decline at a rate of mid-single digits Revenue lower decline compared to volume decl
Slide 25: Q&A Session
Q&A SESSION
Slide 26: Appendix
APPENDIX
Slide 27: Upcoming IR Events
Upcoming IR Events May; Morgan Stanley GEMs Conference – London HSBC’s MENAT Equity Investor Forum - Dubai June; Merill Lynch Emerging Markets Corporate Conference 2016 – Miami Deutsche Bank Consumer Conference - Paris Morga 27
Slide 28: F/X Rates
F/X Rates 1Q2015 1Q2016 Δ% AVG 2.46 2.94 19.7% USD/TL PE 2.61 2.83 8.6% AVG 2.77 3.24 17.0% EUR/TL PE 2.83 3.21 13.3% AVG 62.19 74.63 20.0% USD/RUB PE 58.46 67.61 15.6% AVG 184.64 356.62 93.1% USD/KZT PE 185.65 343.06 84.8% AVG 20.86 25.80 23.7% USD/UAH PE 23.44 26.22 11.8% AVG 18.00 20.07 11.5% USD