Coca-Cola Icecek A.S. · BIST:CCOLA
Coca-Cola Icecek A.S — Investor Presentation (2016)
32 slides from Coca-Cola Icecek A.S's investor presentation, 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... Grow Sparkling Selectively Expand Stills Availability Affordability Acceptability Win, Activation build, participate Commercial Success Prioritize Value Management Win at the Point of Sales SFE RTM RED Data Standardization Opportunity Mapping CDE Management E-Commerce OB
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 9M16
...with all key metrics on track in 9M16 Volume Revenue EBITDA EBITDA > Revenue > Volume 965 mn uc TL 5.675 bn TL 996 mn +2.8% vs. 9M15 +4.1% vs. 9M15 +4.8% vs. 9M15 Succesfull Cost and Opex OPEX NWC / Sales Management & Margin 23.1% 9% in 9M16 vs. Increasing Efficiency -0.4pp vs. 9M15 12% in 9M15 F
Slide 13: 9M16 performance in our regions
9M16 performance in our regions Turkey Pakistan Cental Asia Middle East • Sales volume +1.3% • Sales volume +20% • Sales volume -13% • Sales volume -2% • Revenue growth • Revenue growth • Revenue drop • Revenue drop • Margin contraction • Margin expansion • Margin contraction • Margin expansion 13
Slide 14: Turkey’s volume remains almost flat in 3Q16
Turkey’s volume remains almost flat in 3Q16 • Lower consumer confidence in July and weaker tourism in high season • Slight volume contraction in 3Q due to lower NRTD tea volumes • Volume growth in sparkling and still in 3Q • 0.9% growth in sparkling volume, ahead of transactions due to higher FC gro
Slide 15: Pakistan & Middle East posts 11% volume growth in 3Q16
Pakistan & Middle East posts 11% volume growth in 3Q16 • Double digit volume growth in 3Q • Strong momentum in sparkling • Successful revenue growth management • Significant margin expansion compared to last year • Challenging macroeconomic environment and security issues in Iraq • Total Iraq volume
Slide 16: Central Asia volume contracts by 10% in 3Q16
Central Asia volume contracts by 10% in 3Q16 • Better-than-planned performance • Stabilizing volumes with a lower base in the second half of the year • 6.6% volume contraction in Kazakhstan in 3Q16 • Gradual price increases to partly mitigate the adverse impacts of devaluations • Rationalizing opex
Slide 17: Revenue growth and margin expansion in 9M16
Revenue growth and margin expansion in 9M16 Consolidated Revenue (TL bn) Consolidated EBITDA (TL bn) 17.4% 17.6% Consolidated Consolidated 5.450 5.675 revenue up by 951 996 EBITDA margin up 4% in 9M16 by 11 bps in 1H16 9M15 9M16 9M15 9M16 Revenue per unit case EBITDA Margin in 9M Revenue per uc: Tur
Slide 18: Financial leverage ratios continue improving...
Financial leverage ratios continue improving... Financial debt (US$ million) Maturity (US$ million) 1.160 1.081 2% 7% 18% TL & JD & KT & PKR 16% EUR 77% 80% USD 2015 9M16 Net Debt (US$ million) Net Debt / EBITDA* 832 816 2,47 2,26 667 1,82 9M15 2015 9M16 9M15 2015 9M16 *12 Months Trailing EBITDA 18
Slide 19: ...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) • Lower net interest • TL 86 mn net FX loss • TL 332 mn net income in expense • Net USD/TL exposure of 9M16 vs. TL 113 mn in USD 452 mn as of end 1H15 9M16 19
Slide 20: 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 20
Slide 21: Appendix
Appendix 21
Slide 22: 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 23: 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 23
Slide 24: 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 24
Slide 25: 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 25
Slide 26: 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 27: ...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 28: 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 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