Coca-cola Icecek A.s. · BIST:CCOLA
Coca-cola Icecek A.s — Non-Deal Roadshow (2016)
32 slides from Coca-cola Icecek A.s's roadshow presentation, Oct 22, 2016
Slide 1: Investor Presentation
Investor Presentation
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: Agenda
Agenda A regional powerhouse... ...winning in the marketplace... ...to create shareholder value 3
Slide 4: A regional powerhouse...
A regional powerhouse... 25 plants TL 6.7 bn* annual revenue 1.5 bn uc annual production capacity TL 1 bn* annual EBITDA 5th largest bottler 26 bn annual servings 1.2 bn UC sales volume 380 million people 10 countries *2015 4
Slide 5: ...with sustained growth despite headwinds
...with sustained growth despite headwinds 2005 2016 Single country, 10 countries, 70 mn population, 380 mn population, 318 mn uc sales volume... 1.1bn uc sales volume... 1,13 1,15 Sales 1,06 Volume Organic & 0,85 CAGR Inorganic 0,76 0,67 2005-2015: growth 0,59 14% 0,32 0,42 0,48 0,53 2005 2006 2007
Slide 6: Successful expansion with a diversifying portfolio...
Successful expansion with a diversifying portfolio... Category Breakdown Geographical Breakdown Geographical Breakdown Kazakhstan Tea 8% 9% Other Pakistan Water Turkey Iraq 9% 15% 22% 15% 81% Others 9% 2006 Still 6% 2015 2006 2015 Sparkling 85% International 19% Sparkling 71% Turkey 51% 17 brands 30
Slide 7: ...makes CCI the fifth largest bottler today...
...makes CCI the fifth largest bottler today... Coca-Cola European Partners* Coca-Cola HBC Volume: 2.5 bn uc Volume: 2.0 bn uc Revenue: USD 13 bn Revenue: USD 7 bn Coca-Cola Icecek Volume: 1.1 bn uc Revenue: USD 2.5 bn Coca-Cola Femsa Volume: 3.4 bn uc Revenue: USD 9.6 bn Coca-Cola Arca Volume: 1.5
Slide 8: ...as opportunities are ahead with low per cap consumption...
...as opportunites are ahead with low per cap consumption... Per Cap Consumption (lt) (2015) 180 160 USA Mexico 140 Argentina Relatively low per capita consumption 120 across our territories 100 Germany South Africa Spain Sparkling beverage 80 UK consumption to Bulgaria Hungary #4 Saudi Arabia incre
Slide 9: ... and favorable demographics
... and favorable demographics 380 MILLION 70 MILLION CONSUMERS NEW CONSUMERS BY 2025 2016-2025 Population Average Growth in CCI 16% Territory World Growth 10% 9
Slide 10: We win in the marketplace...
We win in the marketplace... Win, build, participate Selectively Expand Grow Sparkling Availability Affordability Stills Acceptability Activation Commercial Success Revenue Growth Develop & Improve Prioritize Value Management Commercial Capabilities Win at the Point Management Data Standardization o
Slide 11: and create shareholder value…
and create shareholder value… Volume Revenue EBITDA Profitable growth 12% 19% 19% CAGR 2009-2015 CAGR 2009-2015 CAGR 2009-2015 Cost CapEx/Sales OPEX/Sales efficient 10% 25% in 2015 vs. expansion Average 2009-2015 28% in 2009 2009 2011 2013 2015 2009 2011 2013 2015 Optimum Net Debt /EBITDA Investment
Slide 12: ...with all key metrics on track in 1H16
...with all key metrics on track in 1H16 Volume Revenue EBITDA EBITDA > Revenue > Volume 582 mn uc TL 3.430 bn TL 579 mn +3.6% vs. 1H15 +5.7% vs. 1H15 +9.2% vs. 1H15 Succesfull Cost and Opex OPEX NWC / Sales Management & Margin 25.2% 11% in 1H16 vs. Increasing Efficiency -0.6pp vs. 1H15 16% in 1H15
Slide 13: We are building a sustainable business...
We are building a sustainable business... First and only company in Turkey and Succesfull within the Coca-Cola system to be included in the UN Global Compact cost & opex Included in Borsa Istanbul 100 Index management Sustainability Index Positive FCF Recognized as one of Turkey’s top carbon perform
Slide 14: ...with 3 pillars of our sustainability framework...
...with 3 pillars of our sustainability framework... Enhancing personal wellbeing Building stronger communities Protecting the environment Product safety & quality Workplace Protecting the environment • Compliance with international food • CCI Workplace Rights Policy • Energy management and climate
Slide 15: and continue to enhance our reputation
and continue to enhance our reputation Paani – Safe Water project in partnership with WWF started, providing clean drinking water to around 160,000 people in Pakistan Around 650,000 young people participated the Coca-Cola grassroots football tournaments in Azerbaijan and Kazakhstan 310 women benefit
Slide 16: Sound performance in the first half
Sound performance in the first half Turkey Pakistan Cental Asia Middle East • Sales volume +3% • Sales volume +23% • Sales volume -15% • Sales volume -4% • Revenue growth • Revenue growth • Revenue drop • Revenue drop • Margin contraction • Margin expansion • Margin contraction • Margin expansion 16
Slide 17: Turkey’s volume growth accelerates in 2Q16
Turkey’s volume growth accelerates in 2Q16 Turkey volume up by 3% in 1H16 • Succesfull campaigns and promotions supporting volumes 285 mn uc 292 mn uc • 3% sparkling growth in 2Q16, transactions’ growth lagging behind volume 170 176 growth due to Ramadan promotions, driving FC volume 115 116 • 2% de
Slide 18: Pakistan & Middle East posts 18% volume growth in 2Q16
Pakistan & Middle East posts 18% volume growth in 2Q16 Pakistan Volume Growth • Incremental 21 mn uc in 2Q16 and 27 mn uc in 1H16 in Pakistan • Taste the Feeling’ campaign and Ramadan campaigns 28% • New product launches - Coke Zero and new flavors of Fanta 23% • Margin expansion on the back of succ
Slide 19: Central Asia volume contracts by 17% in 2Q16
Central Asia volume contracts by 17% in 2Q16 Central Asia Volume Growth • Better-than-planned performance thanks to more stable macroeconomic 2Q16 1H16 environment -15% -17% • Volume was down by 15% in 1H16 • Gradual price increases to partly mitigate the adverse impacts of devaluations • Rationaliz
Slide 20: Revenue growth and margin expansion in 1H16
Revenue growth and margin expansion in 1H16 Consolidated Revenue (TL bn) Consolidated EBITDA (TL bn) 16.9% 16.3% Consolidated Consolidated revenue up by 6% 579 EBITDA margin up 3.246 3.430 530 in 1H16 by 60 bps in 1H16 1H15 1H16 1H15 1H16 Revenue per unit case EBITDA Margin in 1H 19,3% 5,75 5,78 6,1
Slide 21: Financial leverage ratios continue improving...
Financial leverage ratios continue improving... Financial debt (US$ million) Maturity (US$ million) 1.160 1.097 660 2% 7% USD 500m 20% TL & JD & KT & PKR Eurobond 16% + EUR USD 100m USPP 77% 78% USD 96 105 120 80 37 2015 1H16 2016 2017 2018 2019 2020 2023 Net Debt (US$ million) Net Debt / EBITDA* *1
Slide 22: ...while net income supported by lower FX losses
...while net income supported by lower FX losses Net Interest Expense (TL mn) Net FX Loss (TL mn) Net Income (TL mn) 1H15 1H16 (20) 178 69 57 (197) 59 1H15 1H16 1H15 1H16 • Lower net interest • TL 20 mn net FX loss • TL 178 mn net income in expense • Net USD/TL exposure of 1H16 vs. TL 59 mn in USD 4
Slide 23: Key takeaways
Key takeaways Challenging Maintaining Succesfull operating growth cost & opex environment momentum management Focus on RGM Positive FCF Increasing Improving Healhty efficiency leverage ratios balance sheet 23
Slide 24: Appendix
Appendix 24
Slide 25: Growing sparkling category and per caps
Growing sparkling category and per caps AVAILABILITY AFFORDABILITY ACCEPTABILITY ACTIVATION 55% Brand Love 4 out of 10 countries rank the best, 3 rank the +400 Customer ~55% numeric Affordable entry 2nd best company by tailored campaigns availability within pack availability customers in NARTD 750k
Slide 26: Selectively expanding stills
Selectively expanding stills Win Today Build for Tomorrow Participate Profitably Win in Attractive Categories Create Winning Positions Capture Fair Share of Profit Prioritize countries & portfolio 26
Slide 27: Accelerating revenue and margin growth
Accelerating revenue and margin growth Revenue Growth Management Occasion Focus on IC IC mix in Brand transactions portfolio 27% Package +155% +6pp in Price in 2010-2015 2010-2015 Channel Effective Customer Investment & Management 27
Slide 28: Winning at point of sales
Winning at point of sales Sales Force Effectiveness (SFE) 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 efforts and performance 28
Slide 29: Country Data - 2015
Country Data - 2015 Per cap CCI’s % of pop. consumption market Share in GDP GDP per cap. Pop. (mln) below 30 Country Inflation (3) of sparkling share in CCI’s Growth (3) ($) (3) (6) (2) years beverages sparkling Volume (2) (L) (4) (5) Turkey 3.8% (1) 20,277 8.8% 78.7(1) 49% (1) 44 64% 51% Pakistan 4
Slide 30: Leading market positions in our geography
Leading market positions in our geography Turkey Pakistan Kazakhstan Iraq #1 position in sparkling; 64% #2 position in sparkling; 36% #1 position in sparkling; 50% #1 position in sparkling in North Iraq; 56%* #1 position in juice; 27% 2% market share in juice #6 position in juice; 8% #2 position in
Slide 31: Ratings
Ratings Credit Ratings Long Term Issuer Rating, ‘Baa3’, Stable Outlook (Moody’s rating, September 27, 2016) Local Currency Senior Unsecured and IDR, ‘BBB’, Negative Outlook (Fitch Rating, August 26, 2016) Corporate Governance Rating 9.45 out of 10 (Saha Rating, July 1, 2016) 31
Slide 32: Coca-Cola İçecek Investor Relations
Coca-Cola İçecek Investor Relations Tel: +90 216 528 4000 Fax: +90 216 365 8457 CCI-IR@cci.com.tr www.cci.com.tr ------------------------------------ Deniz Can Yücel Investor Relations Manager Tel: +90 216 528 3386 deniz.yucel@cci.com.tr Borsa Istanbul: CCOLA.IS - Bloomberg: CCOLA TI - Reuters: CCOL