Anadolu Efes Biracilik Ve Malt Sanayii A.s. · BIST:AEFES
Anadolu Efes Biracilik Ve Malt Sanayii A.s — FY2017 Earnings Presentation
28 slides from Anadolu Efes Biracilik Ve Malt Sanayii A.s's earnings presentation, Mar 2, 2018
Slide 1: FY2017 Conference Call Presentation
v FY2017 CONFERENCE CALL PRESENTATION March 2, 2018
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 Environment
GENERAL OVERVIEW & OPERATING ENVIRONMENT Gavin Hudson CEO & Beer Group President
Slide 4: Highlights of 2017
Hightlights of 2017 Solid volume growth through strong performance of international beer operations and soft drinks up 3.8% in 4Q2017 y-o-y up 4.4% in FY2017 Efficient revenue management enabling revenue growth ahead of volume up 28.0% in 4Q2017 y-o-y, highest quarterly growth since 2012 24.
Slide 5: Consolidated Performance – FY2017
Consolidated Performance – FY2017 EBITDA (BNRI) & SALES VOLUME NET SALES REVENUE FREE CASH FLOW EBITDA (BNRI) Margin 17,0% 17,2% mn TL mn TL mn TL 91,3 12.946,9 1.314,9 mhl 87,5 10.420,3 2.228,4 1.030,4 1.771,9 FY2016 FY2017 FY2016 FY2017 FY2016 FY2017 FY2016 FY2017 BREAKDOWN* SALES VOLUME NET SALES
Slide 6: Soft Drinks Volume Development
Soft Drinks Volume Development Volume Breakdown by Country* Others %4.1 *Breakdown is on a combined basis 1,189.1 1,237.5 7% Iraq 9% 588,0 616,5 Kazakhstan 9% Turkey m u/c 50% Pakistan 601,1 621,0 25% Turkey International Consolidated sales volume growth of 1.4% in 4Q and 4.1% in FY2017 Driven b
Slide 7: Beer Volume Development
Beer Volume Development *Breakdown is on a combined basis Total beer group sales volume up by 11% in 4Q2017 and 5.6% in FY2017 Strong growth in international beer mitigated relatively softer volumes in Turkey in FY2017 7
Slide 8: Turkey Beer Operations
Turkey Beer Operations DOMESTIC SALES VOLUME MARKET SHARE* Other 0% Tuborg Efes Turkey 39% 61% 5,5 5,4 FY2016 FY2017 Efes Turkey Tuborg Other Flat beer market in FY2017; Pressure on affordability due to high prices and excise taxes Unfavorable mix of tourism A strong growth in domestic volum
Slide 9: International Beer Operations
International Beer Operations SALES VOLUME mhl 13,9 15,2 FY2016 FY2017 EBI volumes up by 13.7% in 4Q2017 with positive performance of all international operations; Efes Rus posted double digit growth despite cycling a very strong base of last year 15% market share in FY2017 up from 13.9% in FY
Slide 10: 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 11: Financial Overview
FINANCIAL OVERVIEW Onur Çevikel Group CFO
Slide 12: Anadolu Efes Consolidated Performance – FY2017
Anadolu Efes Consolidated Performance – FY2017 ANADOLU EFES CONSOLIDATED (TL mn) FY2016 FY2017 Change (%) Volume (mhl) 87.5 91.3 4.4% Net Sales 10,420.3 12,946.9 24.2% Gross Profit 4,090.6 5,040.4 23.2% EBIT (BNRI) 943.1 1,267.5 34.4% EBITDA (BNRI) 1,771.9 2,228.4 25.8% Net Income* (70.8) 149.4 n.m.
Slide 13: Beer Group Performance – FY2017
Beer Group Performance – FY2017 TURKEY BEER INTERNATIONAL BEER BEER GROUP (TL mn) FY2017 vs FY2016 FY2017 vs FY2016 FY2017 vs FY2016 Volume (mhl) 5.8 (3.2%) 15.2 9.3% 21.1 5.6% Net Sales 1,588.4 10.4% 2,806.8 47.5% 4,425.9 31.3% Gross Profit 940.5 10.2% 1,177.7 41.7% 2,142.6 25.4% EBIT (BNRI) 228.5
Slide 14: Beer Group Free Cash Flow – FY2017
Beer Group Free Cash Flow – FY2017 Beer Group Free Cash Flow (TL mn) FY2016 FY2017 EBITDA 675.9 834.2 Change in Working Capital (4.4) 84.6 Income Taxes & Employee Benefits Paid (71.3) (68.9) CAPEX, net (202.0) (285.4) Net Financial Income /(Expense) (21.9) (25.9) FCF 376.3 538.5 Other investing acti
Slide 15: Balance Sheet Flexibility: Net Leverage Ratio
BALANCE SHEET FLEXIBILITY ◉ Significant FCF generation enabled substantial decrease in net indebtedness ◉ FY2017 Net Leverage Ratios are within comfortable area Net Leverage Ratio:Net Debt / EBITDA (BNRI) Anadolu Efes Consolidated Beer Group 1.9 ◉ 75% of cash is hold as hard 1.7 ◉ 68% of cash is hol
Slide 16: Borrowing Mix & Liquidity Profile: Maturity Schedule
BORROWING MIX & LIQUIDITY PROFILE ◉ Easily manageable debt repayment schedule ◉ Weighted average maturity of debt for Beer Group is app. 4.0 years and 778 Anadolu Efes is app. 3.5 years 729 523 523 519 500 Maturity Schedule BEER CCI 153 141 141 110 AEFES 62 95 60 43 35 18 18 19 2018 2019 2020 20
Slide 17: Interest Breakdown
INTEREST BREAKDOWN ◉ Significant portion of debt is fixed, minimized interest rate risk ANADOLU EFES BEER GROUP Floating : 23% Floating : 15% Floating : 13% Floating : 9% Fixed : 77% Fixed : 85% Fixed : 87% Fixed : 91% FY2016 FY2017 FY2016 FY2017 17
Slide 18: AEFES Consolidated Financial Income/(Expense) – FY2017
AEFES Consolidated Financial Income/(Expense) – FY2017 Financial Income / (Expense) Breakdown FY2016 FY2017 Interest income 81.1 141.3 Interest expense (211.6) (266.0) Foreign exchange gain /(loss) (641.0) (524.1) Other financial expenses (net) (26.5) (25.4) Gain/(loss) on derivative transactions (4
Slide 19: AEFES Consolidated Free Cash Flow – FY2017
AEFES Consolidated Free Cash Flow – FY2017 Anadolu Efes Free Cash Flow (TL mn) FY2016 FY2017 EBITDA 1,768.7 2,212.9 Change in Working Capital 172.5 70.6 Income Taxes & Employee Benefits Paid (133.4) (165.8) CAPEX, net (707.8) (770.8) Net Financial Income /(Expense) (69.6) (31.9) FCF 1,030.4 1,314.9
Slide 20: Returning Value to Shareholders
Returning Value to Shareholders • Due to significant FCF generation, BoD resolved to propose a dividend payment of 250 m TL*, resulting in 2% dividend yield • Record high dividend received from CCI protects strong cash balances * Subject to the approval of General Assembly 20
Slide 21: 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 22: Closing Remarks
CLOSING REMARKS Gavin Hudson CEO & Beer Group President
Slide 23: 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 24: 2018 Guidance
2018 GUIDANCE Sales Volume: Mid-single digits growth on a consolidated basis Total Beer: Flattish to low single digit growth Turkish beer market: Flattish- to low single digit growth Turkey own beer: In line with market Russian beer market: Flattish Russian own beer: In line with market Consolidated
Slide 25: Q&A Session
Q&A SESSION Gavin Hudson, CEO & Beer Group President Onur Çevikel, Group CFO
Slide 26: Appendix
APPENDIX
Slide 27: Gross & Net Debt
GROSS & NET DEBT Anadolu Efes Consolidated Beer Group FY2016 FY2017 FY2016 FY2017 6,183.3 8,509.5 TOTAL FINANCIAL DEBT (m TL) 2,413.1 2,518.8 TOTAL FINANCIAL DEBT (m TL) TOTAL CASH & EQUIVALENTS (m TL) TOTAL CASH & EQUIVALENTS (m TL) 2,756.3 5,498.2 1,279.2 1,606.3 NET DEBT (m TL) 1,134.0 912.5 NET
Slide 28: FX Rates
FX RATES FY2016 FY2017 Δ% AVG 3.02 3.64 20.8% USD/TL PE 3.52 3.77 7.2% AVG 3.34 4.12 23.3% EUR/TL PE 3.71 4.52 21.7% AVG 67.03 58.35 -13.0% USD/RUB PE 60.66 57.60 -5.0% AVG 342.16 326.08 -4.7% USD/KZT PE 333.73 332.33 -0.4% AVG 25.59 26.59 3.9% USD/UAH PE 27.19 28.07 3.2% AVG 19.92 18.49 -7.2% USD/M
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