Coca-Cola Icecek A.S. · BIST:CCOLA
Coca-Cola Icecek A.S — Non-Deal Roadshow (November 2015)
31 slides from Coca-Cola Icecek A.S's roadshow presentation, Nov 12, 2015
Slide 1: London Roadshow 12-13 November 2015
London Roadshow 12-13 November 2015
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
1 CCI at a glance 2 Opportunities & Near Term Strategic Priorities 3 Recent performance 34 Long term Prospects
Slide 4: A regional power house...
A regional power house... 5th largest bottler 10 Kazakhstan 1.1 billion UC sales volume countries Turkey AZ Turkmenistan Kyrgyzstan Tajikistan Syria Iraq 24 billion annual servings to 26 plants* Jordan Pakistan 380 million people 10 thousand employees 2 billion of investment 6 billion annual revenue
Slide 5: ...continues its successful expansion...
…continues its successful expansion… 2004 2006 2007 2008 2014 Expanding our footprint since 2004 Operating in promising markets 275 mn uc 424 mn uc 480 mn uc 553 mn uc 1.13 mn uc • Favorable demographics • Low per cap consumption • Higher GDP growth prospects Existing country New country Reaching ca
Slide 6: ...as one of the largest and fastest growing bottlers...
…as one of the largest and fastest growing bottlers… Coca-Cola HBC Volume: 2.0 bn uc Revenue: USD 8.7 bn Coca-Cola Enterprises* Volume: n.a. Revenue: USD 8.2 bn Coca-Cola Icecek KO Volume Growth Volume: 1.1 bn uc Average (2010-2014) Revenue: USD 2.7 bn 9% 5% 4% 0% -1% Coca-Cola Femsa Volume: 3.4 bn
Slide 7: ...and a key component of TCCC bottling system...
…and a key component of TCCC bottling system… Partners in growth… Bottling and production 2nd largest shareholder Sales and distribution Brand ownership Bottler’s and Distribution Concentrate supply Agreements Customer marketing Brand development Channel development Consumer marketing In-outlet exec
Slide 8: ...with a successful financial track record
…with a successful financial track record Volume Net Revenues EBITDA (milion uc) (TRL million) Delivering value in the past 10 years… (TRL milion) 5.985 • Volume growth 4x 2.924 • Revenue growth 6x 1.131 962 553 • EBITDA growth 7x 549 275 1.032 3.061 Increasing contribution of 578 142 413 internatio
Slide 9: Opportunities ahead with a superior growth profile...
Opportunities ahead with a superior growth profile… A promising geography with Remarkably lower per capita consumption levels Higher GDP growth prospects and increasing disposable income 60% of population base below 30 years 9
Slide 10: ...reflecting favorable demographics & higher GDP growth prospects
…reflecting favorable demographics & higher GDP growth prospects 70 MILLION 380 MILLION NEW CONSUMERS BY 2025 CONSUMERS 48 million new urban population More than 56% will be below 30 2015-2025 Population GDP 18% 6.1% Average CCI Growth World Growth 11% 3.7% Source: UN Population Division, IMF 10
Slide 11: Near term strategic priorities to create shareholder value
Near term strategic priorities to create shareholder value
Slide 12: Continuously improving our execution...
Continuously improving our execution… Cold availability Occasion 70% Brand +5 pp vs. PY Package Price Channel IC mix in SFE portfolio Time in outlet Focus on IC si 30% +28 pp vs. PY transactions si +7pp in +157% 2010-2014 Strike rate in 2010-2014 +23 pp vs. PY Call completion +19 pp vs. PY 12
Slide 13: ...while leveraging technology for better OpEx Management...
…while leveraging technology for better OpEx Management… Route to Market Optimization My Cooler CCI Voyage Up to 20% saving (km) Tracing location of 800k coolers Real time volume tracking at 1100 distributors, 700k points of sale 13
Slide 14: ...and building a sustainable business with a leading performance
…and building a sustainable business with a leading performance Leader in the System Leader in Transparency Among top bottlers in water and energy savings The 1st & only company in Turkey and in the Coca-Cola system listed under UNGC 100 Index Best Country Bottling Operation Award Winner: Turkey 200
Slide 15: Headwinds in 2015...
Headwinds in 2015… Some negatives in our markets…. Devaluations and weak consumer spending in Central Asia Political instability and deteriorating consumer sentiment in Turkey Upheaval and supply disruptions in North Iraq Intensifying competition in Pakistan A weaker performance in the first nine mo
Slide 16: ...weighing on financial performance
…weighing on financial performance 9M15 Performance Volume (mn uc) Revenue (TL mn) 18.2*% EBITDA (TL mn) 17.5% 933 939 5.450 4.903 954 891 453 462 2.753 2.372 456 490 480 477 2.531 2.697 498 401 9M14 9M15 9M14 9M15 9M14 9M15 Turkey International Turkey International Turkey International 3Q15 Perform
Slide 17: Still delivering growth with long term prospects remaining intact
Still delivering growth with long term prospects remaining intact 2015 Guidance Well-equipped to ensure profitable growth…. Consolidated – Mid-single digit volume growth Successful track record to navigate highly volatile markets Turkey – Low single digit volume growth Continuous improvement on mark
Slide 18: Appendix
Appendix • Highlights in 9M15 - Turkey - Pakistan & Middle East - Central Asia • Top Line Performance • Profitability • Financial Expenses • Financial Debt Profile • Free Cash Flow • Corporate Structure • Country Data • Brands & positions in key markets 18
Slide 19: Highlights in the nine months
Highlights in the nine months 3Q15 Turkey Volume Trend Improved momentum both in Turkey and International operations, in line with 5% expectations 1Q15 2Q15 3Q15 Expansion in Turkey EBITDA margin, driven by stronger pricing and effective opex -1% and cost management -8% Pakistan business back to dou
Slide 20: Turkey profitability continues to improve
Turkey profitability continues to improve Volume growth up by 5% in 3Q15, supported by successful summer campaigns, Ramadan promotions and easier base Number of transactions up by 9%, outpacing volume, driven by sparkling in 3Q15 IC share continued to increase Stronger pricing and high single digit
Slide 21: Pakistan & Middle East delivers 5% volume growth in 9M15
Pakistan & Middle East delivers 5% volume growth in 9M15 8% volume growth in Pakistan in 9M15, following double digit 5% decline in Iraq volume in 3Q15 and 9M15 growth in 3Q15 Better than planned business performance in North with Improved availability volume growth in 3Q15 Lower discounts & better
Slide 22: Central Asia volume down by 3% in 9M15
Central Asia volume down by 3% in 9M15 Kazakhstan volume down by 2% in 9M15 due to 6% contraction in 3Q15 Double digit volume contraction in Azerbaijan High growth in Tajikistan with lower base Price increases and portfolio initiatives to mitigate the adverse impacts of devaluations Consumer environ
Slide 23: Top Line Performance
Top Line Performance Consolidated 9M15 9M14 Δ% 3Q15 3Q14 Δ% Volume (m/uc) 939 933 0,6% 377 365 3,4% Net Revenue (TL mn) 5.450 4.903 11,2% 2.205 1.925 14.6% Net Revenue per UC (TL) 5,81 5,26 10,5% 5,85 5,28 10.8% Turkey Volume (m/uc) 477 480 (0,6%) 192 183 5,1% Net Revenue (TL mn) 2.697 2.531 6,6% 1.
Slide 24: Profitability
Profitability* Consolidated 9M14 9M15 Δ% 3Q14 3Q15 Δ% EBIT (TL mn) 642 670 4.2% 290 321 10.6% EBIT Margin 13.1% 12.3% 15.1% 14.6% EBITDA (TL mn) 884 941 6,5% 372 418 12.4% EBITDA Margin 18.0% 17.3% 19.3% 18.9% Turkey EBIT (TL mn) 270 317 17.7% 121 142 16.7% EBIT Margin 10.7% 11.8% 12.3% 13.4% EBITDA
Slide 25: Financial Expenses
Financial Expenses (TL million) 9M15 9M14 Interest income 25 31 Interest expense (-) (135) (112) Foreign exchange gain / (loss) 267 65 Realized FX gain / (loss) – Borrowings (10) (26) Unrealized FX gain / (loss) (626) (116) Gain / (loss) on derivative transactions (1) 3 Financial Income / (Expense)
Slide 26: Financial Debt Profile
Financial Debt Profile Financial debt (US$ million) Maturity (US$ million) 1.140 1.168 661 1% 2% 3% 13% 12% TL & JD & KT PKR 86% EUR 83% 102 94 104 120 USD 51 37 2014 9M15 2015 2016 2017 2018 2019 2020 2023 Net Debt (US$ million) Net Debt / EBITDA* 2,47x 1,96x 9M15 2014 Change 1,70x Total Financial
Slide 27: Free Cash Flow
Free Cash Flow Net Operating Cash Inc. Working Capital (TL Capex (TL mn) Free Cash Flow (TL mn) mn) 729 188 607 86 9M14 9M15 9M14 9M15 9M14 9M15 -419 -643 27
Slide 28: Corporate Structure
Corporate Structure Coca-Cola İçecek A.Ş. 100.00% Tonus Turkish-Kazakh Joint 100.00% Venture L.L.P, CCI International Holland B.V. Coca-Cola Satış ve Dağıtım The Netherlands 99.97% Kazakhstan A.Ş., Turkey J.V. Coca-Cola Almaty Bottlers 51.23% L.L.P., Kazakhstan 48.77% Mahmudiye Kaynak Suyu 100.00%*
Slide 29: Country Data
Country Data % of pop. GDP per Per cap cons CCI’s Pop. in CCI’s 2014 below 30 cap. in of spark. m.share in Country 2014 Vol. years 2014 bev. in 2014 spark. bev. (mln) (2) Breakdown (2) ($) (3) (L) (4) in 2014 (5) Turkey 77.7 (1) 49% (1) 19,556 41 66% 51.1% Pakistan 185.1 63% 4,746 19 35% 21.2% Kazak
Slide 30: Brands & positions in key markets
Brands & positions in key markets Sparkling 66%, #1 Juice 27%, #1 Water 6%, #2 Sparkling 35%, #2 Juice 2%, #8 Water 8%, #3 Sparkling 29%, #2 Energy Water Sparkling 49%, #1 Juice 8%, #5 Water 9%, #4 30
Slide 31: Ratings & Glossary
Ratings & Glossary Credit Rating Glossary Long Term Issuer Rating, ‘Baa3’, Stable Outlook AFB: Alcohol Free Beverages CAGR: Compound Annual Growth Rate (Moody’s rating, Apr 15, 2014) CMB: Capital Markets Board of Turkey HOD: Home and Office delivery water Foreign Currency Senior Unsecured rating and