Coca-cola Icecek A.s. · BIST:CCOLA
Coca-cola Icecek A.s — Investor Presentation (November 2024)
53 slides from Coca-cola Icecek A.s's investor presentation, Nov 7, 2024
Slide 1: Investor Presentation
Investor Presentation 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: Who We Are
WHO WE ARE INVESTOR PRESENTATION 4 PUBLIC
Slide 5: 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 Plant
Slide 6: With a Successful Track Record to Become One of the Leading Bottlers
With a Successful Track Record to Become One of the Leading Bottlers 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
Slide 7: Diversified Country Portfolio Creates Natural Hedge
Diversified Country Portfolio Creates Natural Hedge Oil Importers and Exporters Real GDP Growth < EM avg and > EM avg GDP Per Cap Growth < EM avg and > EM avg Kazakhstan Kazakhstan Kazakhstan Azerbaijan Uzbekistan Azerbaijan Uzbekistan Uzbekistan Kyrgyzstan Kyrgyzstan Kyrgyzstan Azerbaijan Türkiye T
Slide 8: Benefiting from a Strong and Stable Shareholder Structure
Benefiting Anadolu Efes Biracılık ve The Coca-Cola Free Float and Export Other from a Strong Malt Sanayi A.Ş. Corporation and Stable Shareholder Structure 50.3% 20.1% 29.6% Composition • 12 of whom are non-executive 12 Members of BoD • 4 of whom are independent Note: AG Anadolu Grubu Holding A.Ş. is
Slide 9: Our Successful Track Record is Built on Solid Foundations
Our Successful Track Record is Built on Solid Foundations Winning Brand Strong Alignment Proven Track Strategy, Portfolio With the Coca- Record Execution, Cola Company People Innovate to connect Critical for our long- Organic & Inorganic Accelerate with consumers term success growth in emerging & qu
Slide 10: Our Purpose is to Create Value and Integrate Sustainability in Everything We Do
Our Purpose is to Create Value and Integrate Sustainability in Everything We Do INVESTOR PRESENTATION 10 PUBLIC
Slide 11: 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 12: What We Do
WHAT WE DO INVESTOR PRESENTATION 12 PUBLIC
Slide 13: CCI's Two-Pillar Growth Strategy
CCI’s 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 13 PUBLIC
Slide 14: NARTD Value Growth Opportunity
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 includes Sparkl
Slide 15: Strong Addressable Per Cap Consumption Opportunity
Strong Addressable Per Cap Consumption Opportunity 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 cap 154 557
Slide 16: 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 17: More Room for Growth
More Room for Growth 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, Latin CCI** Pacific America Aver
Slide 18: More Room to Diversify Product Portfolio
More Room 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 Asia Pacific Azerbaijan Iraq Pakistan Kazakhstan EMEA Latin America Americ
Slide 19: More Room to Create Growth and Value with Our Customers
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: 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 21: How We Do It
HOW WE DO IT INVESTOR PRESENTATION 21 PUBLIC
Slide 22: 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 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 = Volume x Price x Mix - Discounts Revenue Balance Opportunity Value-driven Terms & OBPPC Promo Spend Mapping Pricing Conditions Identify & prioritize •Consumers’ Well defined pack Increase Optimize growth willingness to pay roles, optimal conditionali
Slide 25: Highest EBIT Margin
Effective RGM + Proactive Procurement + Prudent OpEx Management Leading to Robust EBIT margin Right pricing & Effective Mix Management Prudent Opex Governance Record-high per uc efficiency IC Mix 2,60 Opex/NSR 2,43 2,50 26.3% 25.9% 26.1% 27.3% 2,15 2,05 25.3% 1,97 24.1% NSR/uc 1,89 1,75 1,74 1,80 25
Slide 26: Utilizing Digital to Enhance Customer Experience
Utilizing Digital to Enhance Customer Experience Balancing between digital and human touch. Commercial transformation with Digital RTM Consumer Engagement Platform Suggested Order Digital Customer Experience AI-based order Additional Online Order Consumer Recruitment prediction revenue Online Paymen
Slide 27: Capital Allocation Policy
CAPITAL ALLOCATION POLICY INVESTOR PRESENTATION 27 PUBLIC
Slide 28: 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 29: Smart Capex Management Fueling Organic Growth
Smart Capex Management Fueling Organic Growth Türkiye International 33% 67% By Category* By Year 6.3% 8.1% on 24% 7.3% average 8% 6.1% 6.3% 6.0% 6.2% 5.9% 4.6% 21% Coolers Infrastructure Maintenance 47% Digital 2016 2017 2018 2019 2020 2021 2022 2023 * Without TAS 29 INVESTOR PRESENTATION 29 PUBLIC
Slide 30: Prudent Approach to Geographical Expansion
Prudent Approach to Geographical Expansion Guiding principles for Management control Reasonable Complementary market Geographical & full consolidation ROIC > WACC proximity dynamics expansion rights 19% Volume Breakdown 2006 Kazakhstan 81% Uzbekistan Kyrgyzstan Azerbaijan Türkiye Turkmenistan Tajiki
Slide 31: Successful Uzbekistan Integration
Successful Uzbekistan Outlet Coverage Outlet Coverage Integration 42% 93% Before CCI After CCI CCI NARTD per cap +29% Industry NARTD per cap +63% 369 286 72 117 2021 2023 Achievements in 2023 Further Opportunities to Grow Solid growth in all categories New greenfield is operational as of May’24 440
Slide 32: Bangladesh: Full of Potential
Bangladesh: Favorable Demographics and Macros* Full of Potential 20% population growth Real GDP CAGR 2023 - 28 Median Age 28 vs 34 EM average 5-year population CAGR forecast 600 1.0% in BG vs 0.7% of EM 500 6,7% 4,0% 100 Urbanization is 40% in BG – room to grow, given 57% of world CCI BG** NEW CCI B
Slide 33: Consistent Dividend Pay Out
Consistent Dividend Pay Out CCI Dividend Distribution Policy Is Based On Dividend per Share 1.5% (TL per 100 shares) Net Distributable Income 1.4% 7.86 Dividend Yield* 2.1% 2.7% Free Cash Flow Generation 3.2% 4.3% Capex And Other Funding 2.1% Needs For Growth 2.95 0.5% 2.36 0.3% 1.77 1.97 1.18 0.79
Slide 34: Working Capital Efficiency Improvement
One of the Pillars of Strong FCF: Working Capital Efficiency Improvement 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* Net Working Capital/NSR** Cash Conversion 2016 2017 2018 2019 2
Slide 35: Track Record of Improving Free Cash Flow Generation
Track Record of Improving Free Cash Flow Generation 11.8% Free Cash Flow and FCF Yield* 9.3% 11.0% 8.2% 9.6% 7.6% EBITDA 2.9% Growth -0.3% 0.1% 0.5% 3,863 -0,9% FCF Yield (%) Working 2,153 Capital 1,967 Efficiency 1,079 FCF (TLmn) 729 727 642 10 46 -44 Prudent -483 CapEX 2013 2014 2015 2016 2017 201
Slide 36: Financial Review
FINANCIAL REVIEW INVESTOR PRESENTATION 36 PUBLIC
Slide 37: Summary Financials – 3Q24
Summary Financials – 3Q24 Despite the pressure from volume generation and hence limited scale advantages, we managed to deliver near-flat EBIT margin vs last year Net Sales EBIT Net Revenue (TL) (TL) Income (TL) 9M24 9M24 9M24 108.7 BILLION -5.1% y/y 17.7 BILLION -5.9% y/y 14.3 BILLION -35.3% y/y 16
Slide 38: Per UC Metrics – 3Q24
Nov 1, 2023 Per UC Metrics – 3Q24 Flat NSR/uc delivered and COGS/uc contained successfully thanks to proactive procurement strategies Consolidated (TL) - TL, with TAS 29 Net Sales Revenue COGS EBIT per UC per UC per UC 89.3 88.3 83.9 83.8 59.6 56.5 15.6 54.4 53.3 14.7 14.7 14.4 3Q23 3Q24 9M23 9M24 3
Slide 39: EBIT Development
EBIT Development 98 bps EBIT margin decline y/y amid scale disadvantages -14.1% y/y (mTL) -1.1 billion EBIT Margin 18.5% 17.6% 1,397 548 210 7,504 6,445 3Q23 3Q24 Volume(*) COGS OpEx EBIT EBIT (*) Volume impact is calculated based on Gross Profit Contribution INVESTOR PRESENTATION 39 PUBLIC
Slide 40: Balance Sheet and Risk Management
BALANCE SHEET AND RISK MANAGEMENT INVESTOR PRESENTATION 40 PUBLIC
Slide 41: 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 98%* 99% 100% 30% PACKAGING 2025 30% CONCENTRATE 6%** 40% 26% *100%, in markets wher
Slide 42: Disciplined Financial Management
Disciplined Financial Management Low leverage and strong liquidity maintained Debt & Cash Gross Debt Cash Net Debt Composition / EBITDA Other 15% 1.1x 1.0x USD Other 38% 42% 0.8x USD 51% $1.27B $555M 0.6x TRY 30% EUR TRY 4% 20% 21 22 23 9M24 FX Position Debt $619m 134 91 Maturity 51% -688 $375m 489
Slide 43: 2024 FY Guidance
2024 FY GUIDANCE INVESTOR PRESENTATION 43 PUBLIC
Slide 44: Guidance
2024 From To Guidance Flat-to-Low single-digit volume growth on a Sales Low-to-Mid single-digit volume decline on a consolidated basis: Volume consolidated basis Revised • Low-to-Mid-single digit growth in Türkiye ₺ • Low single digit volume decline to flat in Türkiye • Low-single digit volume decli
Slide 45: Credit Ratings
CREDIT RATINGS INVESTOR PRESENTATION 45 PUBLIC
Slide 46: Solid Credit Ratings
Solid Credit Ratings S&P Global Fitch Issuer Rating BB+ BBB Outlook Negative Stable Last revision 03.09.2024 14.06.2024 Strengths • Leading market shares in growing markets • Successful execution of its expansion plan • Well-known brands • Leading positions in its core markets • Track record of prof
Slide 47: ESG Journey
ESG JOURNEY 47 PUBLIC
Slide 48: Sustainability 2030 Roadmap
Sustainability 2030 Roadmap Packaging Human Rights Commitment #1: Continue to make 100% of our packaging recyclable and use at least Committment #7: Establish mechanisms to ensure that CCI’s distributors and priority 50% recycled material by 2030 suppliers are %100 compliant with CCI Human Rights Po
Slide 49: Appendix
APPENDIX INVESTOR PRESENTATION 49 PUBLIC
Slide 50: 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 51: Subsidiaries
Subsidiaries Coca-Cola İçecek A.Ş. %100.00 %100.00 %100.00 %99.97 CCI International Waha Beverages Holland B.V., Holland B.V., Holland Coca-Cola Satış ve Dağıtım A.Ş., Coca-Cola Almaty Bottlers Turkey %51.23 %48.77 %100.00 LLP, Kazakhstan AEP Anadolu Etap Penkon Azerbaijan Coca-Cola Gıda ve İçecek Ü
Slide 52: Utilizing our Integrated Digital Model for Value Creation
Utilizing our Integrated Digital Model for Value Creation Customer and Asset People Consumer Optimization Experience Experience Balancing between digital Optimized and Resilient Productivity Through and human touch. Supply Chain Digitization, Commercial transformation Upskill/Reskill with Digital RT
Slide 53: Investor Presentation
Investor Presentation For more information, please contact cci-ir@cci.com.tr. INVESTOR PRESENTATION 53 PUBLIC
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