Anadolu Efes Biracilik Ve Malt Sanayii A.s. · BIST:AEFES
Anadolu Efes Biracilik Ve Malt Sanayii A.s — Anadolu Efes — Investor Presentation (August 2021)
41 slides from Anadolu Efes Biracilik Ve Malt Sanayii A.s's investor presentation, August 2021
Slide 1: Anadolu Efes Investor Presentation August 2021
ANADOLU EFES INVESTOR PRESENTATION August 2021
Slide 2: Anadolu Efes At a Glance
— & SS ie A g ne — (anh = FS I | gE a Ata Glance “, Anadolu Efes
Slide 3: A regional beverage company…
A regional beverage company… Europe’s In FY2020; 5th* 700 mn 54.3 mhl 103.5 mhl Population Brewing World’s Sales Volume Capacity 10th* 21 Largest 26.7 bn TL Breweries Brewer Sales Revenue 1.7 bn u/c 26 Bottling Among 5.1bn TL Bottling Plants Capacity Top 10 EBITDA Largest Coca-Cola 3.0 bn TL Bottler
Slide 4: …through its diversified businesses…
…through its diversified businesses… 100% 50.3% BEER OPERATIONS SOFT DRINK OPERATIONS Public -Turkey Beer Operations 24% -International Beer Operations (EBI) 1.5% Public 50% Russia 28.1% 100% Kazakhstan 50.3% 96.9% Moldova 20.1% 43% 100% Georgia 50% Ukraine 4
Slide 5: …with a solid track record of profitable growth…
…with a solid track record of profitable growth… TOTAL VOLUME REVENUE EBITDA & FREE CASH FLOW mhl TL bn Margin % TL mn CAGR CAGR CAGR CAGR +21.2% +23.6% 19.1% +36.4% 17.3% +3.7% 103.5 26.7 5,098 3,012 86.1 10.2 1,766 638 2015 2020 2015 2020 2015 2020 2015 2020 2020 2020 2020 4% 2020 9% 7% 6% 8% 10%
Slide 6: …and a solid investment theme
…and a solid investment theme Diversified business model Strategic Partnerships with World’s leading FMCG companies; AB InBev & including beer and soft drinks TCCC Strong brand portfolio including some Strong market positions across all of the world’s best known brands and operations strong regional
Slide 7: Beer Operations
\ EFES » MLrg a. He y g oe — (un) SS A ) _ / Beer Operations fy
Slide 8: Beer Group in a Nutshell…
Beer Group in a Nutshell… 6 countries 21 Breweries, 100+ brands RUSSIA 54.3 mhl brewing capacity, 70+ export countries 36.2 mhl beer volume UKRAINE KAZAKHSTAN 12.3 bn TL revenue* & 1.9 bn TL EBITDA* MOLDOVA GEORGIA TURKEY Leadership in all operations Volume Breakdown* Revenue Breakdown* EBITDA Break
Slide 9: …leading position with potential market growth…
…leading position with potential market growth… RUSSIA UKRAINE TURKEY KAZAKHSTAN GEORGIA MOLDOVA Market Position 1 1 1 1 1 1 # Breweries 11 3 3 2 1 1 Brewing Capacity (in mhl) 33.5 7.7 7.0 2.6 2.01 1.51 Beer Market Size (in mhl) 73.0 16.4 8.7 5.3 1.1 1.0 Per Capita Beer Consumption (in liter) 51 41
Slide 10: …with strategic priorities to drive value
…with strategic priorities to drive value FINANCIAL OPERATIONAL DISCIPLINE & CUSTOMERS & EXPANSION & PEOPLE BRANDS STAKEHOLDERS EXCELLENCE VALUE CONSUMERS GROWTH CREATION Nurturing our Providing Building Achieve Enhancing Building Expanding our talents by choice, great competitive profitable growth
Slide 11: 1H2021 Beer Group Performance
1H2021 Beer Group Performance
Slide 12: Double digit growth rates delivered in Turkey and CIS
Double digit growth rates delivered in Turkey and CIS BEER GROUP INTERNATIONAL BEER TURKEY BEER VOLUME SALES VOLUME SALES VOLUME SALES VOLUME BREAKDOWN* Turkey 12% 17.4 18.2 15.5 16.0 CIS mhl mhl mhl 11% 1.9 2.1 10.5 10.9 9.3 9.5 1.4 1.1 77% Russia 2Q20 2Q21 1H20 1H21 2Q20 2Q21 1H20 1H21 2Q20 2Q21 1
Slide 13: Winning brand portfolio in Russia and Ukraine
Winning brand portfolio in Russia and Ukraine Focus on Global Brands Super Premium & Premium Increasing share in Growth Growth Non-Alcohol Beer RUSSIA Expanding Non-Alcohol Beer Development of Non-Beer Growth in Global Brands Portfolio Segment UKRAINE 13
Slide 14: Value generating initiatives in CIS Countries
Value generating initiatives in CIS Countries Sustaining Market Strengthening Growing Leadership Core & Premium Brands Non-Alcohol Beer New Packs & Multipacks Digitalization Launch of New Flavored beer 14
Slide 15: Continued focus and brand investments in Turkey
Continued focus and brand investments in Turkey Stabilization of Portfolio Premiumisation Increasing Visibility Launch of Seasonal & New Packs & Multipacks Marketing Activations New Flavored beer 15
Slide 16: Soft Drink Operations
Soft Drink Operations
Slide 17: Coca-Cola Icecek in a nutshell…
Coca-Cola Icecek in a nutshell… • 10 countries, ~400 mn people • 26 production plants with 126 lines • 1.7 bn UC(1) annual production capacity KAZAKHSTAN • ~780 thousand sales points AZERBAIJAN KYRGYZSTAN TURKEY TURKMENISTAN TAJIKISTAN • 1.2 bn UC sales volume SYRIA • 14.4 bn TL revenue & 3.1 bn TL
Slide 18: …with clear priorities
…with clear priorities Accelerate Win at the Exercise Financial Win with People Growth Point of Sale Discipline • Full-beverage portfolio • Increase outlet coverage • Productivity savings • Integrated Talent Strategy • Revenue Growth Management • Increase cooler penetration • Working capital improve
Slide 19: 1H2021 Soft Drink Performance
1H2021 Soft Drink Performance
Slide 20: Robust growth continued in soft drinks…
Robust growth continued in soft drinks… SOFT DRINKS VOLUME SALES VOLUME BREAKDOWN* Middle East 9% 674 567 CIS Turkey 273 19% 39% m u/c 393 328 237 153 130 330 401 198 240 33% 2Q2020 2Q2021 1H2020 1H2021 Turkey International Pakistan Turkey Operations International Operations • Turkey volume growth o
Slide 21: … with accelerating momentum in Turkey despite limited mobility
… with accelerating momentum in Turkey despite limited mobility 21
Slide 22: …broad based growth performance in international operations
…broad based growth performance in international operations 22
Slide 23: 1H2021 Consolidated Financial Overview
1H2021 Consolidated Financial Overview
Slide 24: Solid financial results delivered in 2Q…
Solid financial results delivered in 2Q… NET REVENUE REVENUE Solid volume performance 2Q 1H Price increases & premiumization & tight discount management +46.9% +42.8% SKU prioritization especially in soft drink operations EBITDA BNRI 2Q 1H EBITDA MARGIN Calendarization of some expenses to 2Q
Slide 25: …with strong FCF from both operations…
…with strong FCF from both operations… VOLUME NET REVENUE EBITDA BNRI EBITDA BNRI% FREE CASH FLOW +55.0% ANADOLU +41.5% 2Q 1H 2Q 1H 2Q 1H 2Q 1H EFES 715 mTL 2,785 v +139.4% 2,069 v 1,796 1,462 vs. PY 33.2 mhl 56.4 mhl 10,387 mTL 16,547 mTL 19.9% 16.8% 2,204 mTL 1,953 mTL +14.2% vs. PY +13.7% vs. PY
Slide 26: …improvement in both operational profitability and working capital
…improvement in both operational profitability and working capital Beer Group 570 -397 EBITDA -218 Bridge 678 79 713 mTL Net Cost of Selling, Other 2Q2020 Revenue Sales Marketing 2Q2021 and G&A expenses 184 -64 -7 Free Cash Flow 33 1,674 1,527 Bridge mTL EBITDA Changes CAPEX, net Taxes & 2Q2021 2Q20
Slide 27: …leading to low leverage ratios…
…leading to low leverage ratios… Net Debt / EBITDA (BNRI)1 Maturity Schedule2 Anadolu Efes - 85% of cash is hold as hard 662 1.1 (mn USD) 0.9 3 500 currency 439 0.7 573 -79% of debt is in hard currency 223 152 185 38 89 - 96% of debt is fixed Jun’ 20 Dec’ 20 Jun’ 21 2021 2022 2023 2024 2028 Beer Gro
Slide 28: …by sustainable improvement in free cash flow…
…by sustainable improvement in free cash flow… Beer Group Anadolu Efes 1,293 +346% 3,012 1,084 CAGR +97% 2,335 36% mTL mTL 793 1,953 551 539 1,315 443 1,030 1,054 991 376 243 638 2015 2016 2017 2018 2019 2020 1H20 1H21 2015 2016 2017 2018 2019 2020 1H20 1H21 28
Slide 29: … with clear priorities for balance sheet management
… with clear priorities for balance sheet management Record-low Core Working Capital • Expected to be normalized in 2H Investment grade rating maintained • After latest review of Fitch Extended Debt Maturity • 500 m$ Eurobond issuance with 7Y tenor • 320 m$ tender offer ~75%* of cash held in hard cu
Slide 30: Going Forward and 2021 Outlook
Going Forward and 2021 Outlook
Slide 31: Maximizing value of our business…
Maximizing value of our business… Maximizing Maintaining a Maximizing Investing in organic growth healthy balance shareholder inorganic growth sheet value Invest in brands, Leverage market and capacity Net Debt/EBITDA: Dividend pay-out acquisition 1.0x - 2.0x ratio of min. 40% opportunities Capital
Slide 32: …driven by commitment to sustain profitable leadership
…driven by commitment to sustain profitable leadership Market Investments Revenue / hl Drivers • Cooler investments • Price increases • Distribution effectiveness • Premiumization • Digitalization • Discount management • Right portfolio mix & channel mix Brand Investments Cost and Expense Management
Slide 33: Topline guidance upgraded with better than expected 1H…
Topline guidance upgraded with better than expected 1H… VOLUME SALES REVENUE continuing impact of pandemic FX-Neutral basis Consolidated: Beer Group: Soft Drinks: Consolidated: Beer Group: Soft Drinks: Mid-single digit Low-single High single digit High-Teens Low-teens Low-to-mid twenties (Previously
Slide 34: Sustainability
Sustainability
Slide 35: Our Commitments – Road to 2030
Our Commitments – Road to 2030 Targeting Zero Increasing Getting Stronger For the environment Our support for social Through diversity & impact inclusion We love the Earth. We’re aiming zero We will increase our social impact through mid We believe in diversity & equality through environmental impac
Slide 36: Appendix
\ EFES / A Eg Pe — (on) we A i] i] a Vi APPENDIX AP »;4 yc \
Slide 37: Russian Beer Operations
Russian Beer Operations World’s 6th* largest beer market with 73 mhl market size; 01 Russian beer market grew by low single** digit in 2020 & our volumes grew by mid-single digit Sustained both volume and value leadership & clear market 02 leader in Super Premium & Premium segments Focus on premium
Slide 38: Turkey's largest brewer
Turkey’s largest brewer Low per capita consumption of 11 liters* Rich portfolio of local, imported & licensed offering a growth potential brands covering all segments #1 in consumer spending in Food & Beverage Growing population with 1.2% CAGR in category 2015-2020 99% penetration in alcohol selling
Slide 39: Effective management of Commodity & FX exposures…
Effective management of Commodity & FX exposures… • Cash flow hedge via designation & derivatives FX exposure in 78%* COGS&OPEX&Interest hedged in Turkey for 2021 84%** 79%*** 100% Hedged positions for 2021* Hedged in Russia & Ukraine 100% Turkey’s 2021 local Hedged positions for barley procurement
Slide 40: Increasing dividend yields
Increasing dividend yields Gross Dividend per Share (TL per 100 shares) Dividend Dividend yield: yield: 8.3%* 7.7% TL 1.93 TL 1.77 Dividend yield: Dividend Dividend 2.4% yield: yield: 2.0% 1.8% Dividend Dividend yield: TL 0.46 yield: 1.4% TL 0.51 1.3% TL 0.42 TL 0.25 TL 0.25 2014 2015 2016 2017 2018
Slide 41: Thank You
THANK YOU