Anadolu Efes Biracilik Ve Malt Sanayii A.s. · BIST:AEFES
Anadolu Efes Biracilik Ve Malt Sanayii A.s — Anadolu Efes — H1 2017 Earnings Presentation
34 slides from Anadolu Efes Biracilik Ve Malt Sanayii A.s's earnings presentation, July 2017
Slide 1: Investor Presentation Post 1H2017 Volume Announcement
v INVESTOR PRESENTATION Post 1H2017 Volume Announcement
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: Anadolu Efes - Ownership Structure
ANADOLU EFES - OWNERSHIP STRUCTURE ANADOLU GROUP1 AB Inbev Yazıcılar Özilhan Sınai Anadolu Endüstri 24.0% 23.6% 13.5% 6.0% Harmony Ltd. Holding Yatırım Holding 33% Public BEER SOFT DRINK 50.3% OPERATIONS OPERATIONS TURKEY COCA-COLA BEER OPERATIONS İÇECEK2 (CCI) COCA-COLA OPERATIONS INTERNATIONAL BEE
Slide 4: Anadolu Efes at a Glance
ANADOLU EFES AT A GLANCE* Serving more than 670 mn people 16 countries; 14 Breweries & 24 Bottling Plants 16 11 ◉ Europe’s 6th largest brewer ◉ World’s 14th largest brewer ◉ 5th largest Coca-Cola bottler in the Cola system 2005 2016 # of Countries** World class brand portfolio in beer & soft drinks
Slide 5: Volume Performance – 1H2017
VOLUME PERFORMANCE – 1H2017 TURKEY BEER INTERNATIONAL BEER SOFT DRINKS AEFES CONSOLIDATED %11.1 %4.1 %4.4 42.7 44.6 6.8 7.6 m u/c mhl 2.9 2.6 581.9 605.6 mhl mhl 1H2016 1H2017 1H2016 1H2017 1H2016 1H2017 1H2016 1H2017 BREAKDOWN* AEFES Consolidated Beer Group Soft Drinks 23% 26% 50% 50% 77% 74% Beer
Slide 6: Consolidated Performance – 1Q2017
Consolidated Performance – 1Q2017 SALES VOLUME NET SALES REVENUE EBITDA (BNRI) & EBITDA (BNRI) Margin 13.1% 12.2% mn TL mn TL mhl 2,425.7 1,933.2 295.2 16.5 17.5 252.9 1Q2016 1Q2017 1Q2016 1Q2017 1Q2016 1Q2017 BREAKDOWN* 7% 12% 18% 19% 24% 75% 18% 64% 63% Turkey Beer International Beer Soft Drinks 6
Slide 7: 1Q2017 Key Highlights
1Q2017 KEY HIGHLIGHTS ◉ Volume up 6.0% in 1Q2017 vs. 1Q2016 The highest quarterly volume growth since 2014 Benefiting from strong performance of international beer operations and soft drinks ◉ Revenue up 25.5% in 1Q2017 y-o-y, outperforming volume growth Strong volume growth Local currency price
Slide 8: Strong Competitive Advantages
STRONG COMPETITIVE ADVANTAGES ◉ Balanced Beer & Soft Drink Operations ◉ Strategic Partnership with AB InBev & TCCC ◉ Expertise & Know-how in driving cost efficiencies ◉ Strong regional player powered by proven local know-how 8
Slide 9: Solid Cash Flow Generation
SOLID CASH FLOW GENERATION 1,030 1,016 735 TL million 638 486 479 413 345 172 171 118 118 45 -138 2010 2011 2012 2013 2014 2015 2016 FCF FCF (Including Investing Activities) 9
Slide 10: Long Term Key Priorities
LONG TERM KEY PRIORITIES Continue to generate value by margin improvement and FCF generation through our priorities ◉ Capitalizing on our strong brand portfolios Beer ◉ Achieving optimal brand & SKU mix ◉ Excelling in execution ◉ Focusing on quality market share ◉ Strong cash flow generation with sp
Slide 11: Anadolu Efes
ANADOLU EFES
Slide 12: Beer Operations
BEER OPERATIONS RUSSIA #2 Brewer* #2 %15 Market Share MOLDOVA #1 #1 Brewer** KAZAKHSTAN #1 #1 Brewer* GEORGIA #1 #1 Brewer*** TURKEY #1 Brewer* %62 Market Share #1 12 * Volume share, Nielsen, 1Q2017 ** Company estimates *** Gamma Retail Audit
Slide 13: Markets with Low Per Capita Consumption and High Growth Potential
MARKETS WITH LOW PER CAPITA CONSUMPTION AND HIGH GROWTH POTENTIAL ◉ Operating markets with growth potential characterized by low per capita consumption young populations developing economies westernization/urbanization Per Capita CAGR Growth 2011-2016(%) 12% Efes Operating Countries 7% ROMAN
Slide 14: Beer Group Strategy
BEER GROUP STRATEGY BRANDS Provide choice and innovation to consumers: Grow brand love E XECUTION Excell in customer collaboration availability and point of sale activation E FFICIENCY Build competitive advantage through lean and efficient operations RELATIONS Focus on employees, customers, regulato
Slide 15: Turkish Beer Market
TURKISH BEER MARKET ◉ Low per capita consumption of 11 liters* offering a growth potential ◉ Growing population with 1.4% annual growth rate in 2016 48% is below age 30 ◉ Returnable market enabling higher operational profitability Bottles & kegs amount to more than half of total beer market 15 *
Slide 16: Efes Turkey
EFES TURKEY Low per capita consumption of 11 liters offering a growth potential ◉ 3 Breweries, 2 Malteries & 1 Hops Processing Facility ◉ 62% market share* ◉ 100% brand awareness for “Efes Pilsen” ◉ Rich portfolio of local, imported & licensed brands covering all segments ◉ # 1 in consumer spending
Slide 17: Russian Beer Market
RUSSIAN BEER MARKET ◉ World’s 5th largest beer market with total consumption of ~80 mhl ◉ Expected compounded annual growth rate of 2%* between 2017-2021 ◉ Dominated by multinational brewers Top 4 accounting for ~ 72% of the market ◉ Share of Modern Trade above 60% - more than doubled in the last f
Slide 18: Efes Russia
EFES RUSSIA #2 player with; Efes RUSSIA ◉ 6 Breweries – 21.7 mhl total brewing capacity Efes RUSSIA 15% 16% ◉ 4 Malteries & 1 Preform Plant Carlsberg Carlsberg 32% 32% ◉ AEFES’ largest beer market; 58% of total beer volumes from Russia in 1Q2017 Inbev Inbev 12% 12% ◉ 15% overall market share* Heinek
Slide 19: Other International Beer Operations
OTHER INTERNATIONAL BEER OPERATIONS ◉ Market leader in Kazakhstan Georgia Moldova 19
Slide 20: Commitment to Environment
COMMITMENT TO ENVIRONMENT ENERGY AND EMISSIONS MANAGEMENT 10%+10% Compared to 2008, we consumed 10% less energy and generated 10% fewer emissions per unit product. Between 2008- 2013 the amount of energy we saved is equal to the yearly consumption of 200.000 households OPERATIONAL RELIABILITY 22 Tho
Slide 21: Slide 21
Slide 22: CCI at a Glance
CCI AT A GLANCE ◉ Market leader in Turkey with 64% ◉ 24 Bottling Plants in 10 Countries & Kazakhstan with 49% market ◉ 5th largest Coca-Cola bottler in Cola system share ◉ Annual capacity of 1.4bn uc ◉ #2 in Pakistan with 37% market ◉ 1.2bn uc sales volume share & #2 in Iraq ◉ 26bn annual servings 5
Slide 23: CCI at a Glance: Sparkling Beverage Consumption vs GDP
CCI AT A GLANCE 180 Sparkling Beverage Consumption vs GDP (2015) 150 Mexico USA Per Cap Consumption (liters) Argentina 120 Germany 90 UK Spain South Africa Saudi Arabia Bulgary 60 Hungary Oman Poland Jordan Iraq Turkey Kazakhstan Greece Turkmenistan Russia Italy CCI territory 30 Kyrgyzstan Egypt Tot
Slide 24: Soft Drinks Business Strategic Priorities
SOFT DRINKS BUSINESS STRATEGIC PRIORITIES 1 Accelarate Revenue and Margin Growth 2 Grow Sparkling Category and Per Caps 3 Selectively Expand Profitable Still Portfolio 4 Continue to Build and Enchance Our Reputation 5 Build a World Class Organisation 24
Slide 25: Strong Brand Portfolio
STRONG BRAND PORTFOLIO BRAND & FLAVOR EXPANSION PACKAGE INNOVATION 2006 2016 BRANDS 17 34 DIFFERENTIATED PACKAGE SEGMENTATION ACROSS CHANNELS, CUSTOMERS FLAVORS 44 150 & CONSUMERS 25
Slide 26: Anadolu Efes Financials and Outlook
ANADOLU EFES N AN \ \ FINANCIALS AND OUTLOOK K Ns
Slide 27: Financial Highlights
FINANCIAL HIGHLIGHTS TURKEY BEER INTERNATIONAL BEER CCI (TL mn) (TL mn) (TL mn) 1Q2017 vs 1Q2016 1Q2017 vs 1Q2016 1Q2017 vs 1Q2016 Volume (mhl) 1.2 -3.6% 3.2 14.8% 233.0* 5.1% Net Sales 294.8 4.0% 570.3 65.9% 1,555.7 19.5% Gross Profit 160.1 1.7% 226.1 45.9% 481.4 15.3% EBIT (BNRI) 16.1 -31.4% -9.3
Slide 28: Gross & Net Debt
GROSS & NET DEBT Anadolu Efes Consolidated Beer Group 1Q2016 1Q2017 1Q2016 1Q2017 5,271 6,425 TOTAL FINANCIAL DEBT (m TL) 2,009 2,524 TOTAL FINANCIAL DEBT (m TL) TOTAL CASH & EQUIVALENTS (m TL) TOTAL CASH & EQUIVALENTS (m TL) 1,709 2,683 843 1,296 NET DEBT (m TL) 1,166 1,228 NET DEBT (m TL) 3,562 3,
Slide 29: Balance Sheet Flexibility
BALANCE SHEET FLEXIBILITY ◉ 1Q2017 Net Leverage Ratios are within comfortable area Net Leverage Ratio:Net Debt / EBITDA (BNRI) Anadolu Efes Consolidated Beer Group 2.0 2.1 ◉ 74% of cash is hold as hard ◉ 70% of cash is hold as hard times times currency 1.8 currency 1.7 ◉ 99% of debt is in hard ◉ 100
Slide 30: Borrowing Mix & Liquidity Profile
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. 3.1 years 750 696 500 508 mn USD eq. BEER 159 128 128 116 CCI 98 98 63 54 54 44 43 AEFES 35 8 8 8 8 8 2017 2018 2019 2020 2021 2022
Slide 31: Interest Breakdown
INTEREST BREAKDOWN ◉ Significant portion of debt is fixed, minimized interest rate risk ANADOLU EFES BEER GROUP Floating : 25% Floating : 23% Floating : 23% Floating : 13% Fixed : 75% Fixed : 77% Fixed : 77% Fixed : 87% 1Q2016 1Q2017 1Q2016 1Q2017 31
Slide 32: 2017 Guidance
2017 GUIDANCE Since first quarter is relatively a small quarter, we cautiously reiterate our guidance for Anadolu Efes. Sales Volume: Low-to-mid single digit growth on a consolidated basis • Total Beer: low single digit growth • Turkey beer: flattish vs a flattish market • Russian beer: outperforman
Slide 33: Financial Priorities
FINANCIAL PRIORITIES ◉ Sustain consolidated cash flows through; ◉ Efficiency improvements via savings focus on working capital optimization ◉ Managing impact of F/X volatility on operations optimized capex policy ◉ Commitment to Investment Grade Ratings sticking to tight balance sheet manageme
Slide 34: Financial Highlights – FY2016
FINANCIAL HIGHLIGHTS – FY2016 TURKEY BEER INTERNATIONAL BEER CCI (TL mn) (USD mn) (TL mn) FY2016 vs FY2015 FY2016 vs FY2015 FY2016 vs FY2015 Volume (mhl) 6.0 -9.9% 13.9 -0.9% 1,189.1** 3.2% Net Sales 1,438.6 -3.1% 630.6 -13.0% 7,050.2 4.9% Gross Profit 853.5 -6.0% 275.4 -20.3% 2,392.5 2.5% EBIT (BNR