28 slides from Anadolu Efes Biracilik Ve Malt Sanayii A.s's earnings presentation, Nov 4, 2016
Slide 1: Beer Operations 3Q2016 & 9M2016 Financial Results Conference Call
BEER OPERATIONS 3Q2016 & 9M2016 FINANCIAL RESULTS CONFERENCE CALL ROBIN GOETZSCHE - BEER GROUP PRESIDENT & CEO ONUR ÇEVİKEL - CFO November 4, 2016
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
Slide 4: Key Highlights on Consolidated Performance – 9M2016
Key Highlights on Consolidated Performance – 9M2016 Volume up 2.5% in 3Q2016 vs. 3Q2015 Improvement in beer volumes both in Turkey & Russia in the 3Q vs. 1H2016 1.7% volume growth in soft drink business Revenue up 0.1%, slightly underperforming volumes; Despite local currency price increases i
Slide 5: Consolidated Performance
Consolidated Performance SALES VOLUME NET SALES REVENUE EBITDA (BNRI)* 19.2% 18.7% 0.9% 0.1% -2.4% 1.547,7 8.260,0 8.265,0 1.586,1 mn TRL 70,4 mhl 69,8 mn TRL 9M2015 9M2016 9M2015 9M2016 9M2015 9M2016 Numbers may not add up to 100% due to rounding BREAKDOWN** 7% 13% 20% 16% 18% 17% 78% 69% 63% Turke
Slide 6: Soft Drinks Volume Development
Soft Drinks Volume Development Volume Breakdown by Country 938.5 2.8% 965.1 Kazakhstan Other 8% 7% Iraq 4.4% 8% 461,5 482,1 m uc 1.3% Pakistan 477,0 483,0 Turkey 26% 50% 9M2015 9M2016 Turkey International Turkey delivered 1.3% volume growth in 9M2016 International operations’ volume was up by 4.
Slide 7: Beer Volume Development
Beer Volume Development SALES VOLUME Total beer group sales volume at 15.7 mhl 16.6 (-5.4%) 15.7 Russian beer market performed well in 3Q on 5,2 4,6 (10.8%) the back of; Favorable summer weather (-3.0%) 11,4 mhl 11,0 Improving economic conditions 9M2015 9M2016 International Beer Turkey Beer VOLU
Slide 8: Turkey Beer Operations
Turkey Beer Operations Continued to focus on; DOMESTIC SALES VOLUME Sales execution (11.4%) Sales & Marketing investments 4,8 4,3 Innovative launches mhl Working capital management and FCF 9M2015 9M2016 VOLUME SHARE 0,1% 33% 67% Efes TURKEY Tuborg Other 8
Slide 9: International Beer Operations
International Beer Operations SALES VOLUME (3.0%) (1.0%) excl. Ukraine 11,0 11,4 mhl 9M2015 9M2016 LC revenue per liter increased in all operations Price increases and positive brand mix in all operations EBITDA margin up 39 bps y-o-y in 9M2016, benefitting from, Tightly controlled opex Higher
Slide 10: Russia
Russia Beer market decline of low-single digits in 9M2016 vs 9M2015 (better than expected) Market share gain as well as improving margins as a result of; Share gain in Premium and Upper Mainstream brands Market facing projects and initiatives due to rounding - Numbers may not add up to 100% Volu
Slide 11: Beer Group Strategy
RANDS XECUTION FFICIENCY ELATIONS ny Wy "
Slide 12: Financial Overview
ONUR ÇEVİKEL CFO FINANCIAL OVERVIEW
Slide 13: Anadolu Efes Consolidated Performance
Anadolu Efes Consolidated Performance (mn TL) 9M2015 9M2016 Change % Volume (mhl) 69.8 70.4 0.9% Net Sales 8,260 8,265 0.1% Gross Profit 3,466 3,311 -4.5% EBIT (BNRI) 978 935 -4.4% EBITDA (BNRI) 1,586 1,548 -2.4% Net Income* -179 364 303.3% Margins Change (bps) Gross Profit 42.0% 40.1% -191 EBIT (BN
Slide 14: Beer Group Performance
Beer Group Performance Turkey Beer International Beer Beer Group (mn TL) (mn USD) (mn TL) 9M2016 vs 9M2015 9M2016 vs 9M2015 9M2016 vs 9M2015 Volume (mhl) 4.6 -10.8% 11.0 -3.0% 15.7 -5.4% Net Sales 1,108.1 -5.3% 497.9 -18.4% 2,590.0 -7.8% Gross Profit 655.8 -9.8% 228.2 -22.5% 1,339.2 -11.9% EBIT (BNR
Slide 15: Beer Group Free Cash Flow
Beer Group Free Cash Flow Beer Group Free Cash Flow (TL mn) 9M2015 9M2016 EBITDA 624.7 548.2 Change in Working Capital -144.5 -171.2 Income Taxes & Employee Benefits Paid -54.4 -47.0 CAPEX, net -176.0 -144.6 Net Financial Income /(Expense) 59.9 1.7 FCF 309.8 187.1 Other investing activities (Acq., D
Slide 16: Balance Sheet Flexibility
Balance Sheet Flexibility Net Debt / EBITDA (BNRI) 9M2015 2015YE 9M2016 Anadolu Efes Consolidated 2.3 2.0 1.8 Beer Group 1.9 1.6 1.8 BEER 9M2015 9M2016 AEFES 9M2015 9M2016 TOTAL FINANCIAL DEBT m TL 2,283 2,179 TOTAL FINANCIAL DEBT m TL 5,838 5,418 TOTAL CASH & EQUIVALENTS m TL 834 1,023 TOTAL CASH &
Slide 17: Borrowing Mix & Liquidity Profile: Maturity Schedule
Borrowing Mix & Liquidity Profile Easily manageable debt repayment schedule Average maturity of debt for; Beer Group is app. 4.6 years and Anadolu Efes is app. 3.3 years 707 651 Maturity Schedule* 500 500 152 153 122 110 120120 87 65 86 36 56 37 37 43 2016 2017 2018 2019 2020 2021 2022 2023
Slide 18: Interest Breakdown
Interest Breakdown Significant portion of debt is fixed, minimized interest rate risk Beer Group Anadolu Efes 9M2015 9M2016 9M2015 9M2016 27% 21% 26% 29% 73% 71% 74% 79% Fixed Floating Fixed Floating 18
Slide 19: Financial Income/Expense Breakdown
Financial Income/Expense Breakdown Financial Income / (Expense) Breakdown 9M2015 9M2016 Interest income 59.6 53.5 Interest expense -168.3 -153.4 Foreign exchange gain /(loss) -929.4 -66.5 Other financial expenses (net) -22.6 -18.3 Fain/(loss) on derivative transactions -1.6 -5.7 Net Financial Income
Slide 20: Anadolu Efes Consolidated Free Cash Flow
Anadolu Efes Consolidated Free Cash Flow Anadolu Efes Free Cash Flow (TL mn) 9M2015 9M2016 EBITDA 1,575.5 1,544.8 Change in Working Capital -263.5 -183.6 Income Taxes & Employee Benefits Paid -121.5 -85.8 CAPEX, net -802.2 -489.4 Net Financial Income /(Expense) 181.7 -48.7 FCF 570.0 737.3 Other inve
Slide 21: Financial Priorities
Financial Priorities Sustain consolidated cash flows through; focus on working capital optimization optimized capex policy sticking to tight balance sheet management Deleveraging Efficiency improvements via savings Managing impact of F/X volatility on operations Commitment to Investment Grade
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 Outlook is reiterated
2016 Outlook is reiterated... Turkey beer market decline mid-single digit Efes Turkey volume decline mid-to-high single digit BEER GROUP Russian beer market decline low-to-mid-single digit EFES RUS volume outperform the market Total beer volume decline at a rate of low-single digits Revenue lower de
Slide 25: Q&A Session
Q&A SESSION
Slide 26: Appendix
ANADOLU EFESi
Slide 27: Upcoming IR Events
Upcoming IR Events November Citi's Turkish Symposium | Frankfurt | 23 November 2016 December WOOD's 5th Winter Conference | Prague | 2 December 2016 27
Slide 28: F/X Rates
F/X Rates 9M2015 9M2016 Δ% AVG 2.66 2.93 10.3% USD/TL PE 3.04 3.00 -1.6% AVG 2.96 3.27 10.4% EUR/TL PE 3.42 3.36 -1.8% AVG 59.28 68.37 15.3% USD/RUB PE 66.24 63.16 -4.6% AVG 195.57 344.57 76.2% USD/KZT PE 270.40 334.93 23.9% AVG 21.42 25.48 18.9% USD/UAH PE 21.53 25.91 20.4% AVG 18.45 19.89 7.8% USD