35 slides from Anadolu Efes Biracilik Ve Malt Sanayii A.s's earnings presentation, November 2016
Slide 1: Investor Presentation Post 9M2016 Financials
INVESTOR PRESENTATION Post 9M2016 Financials
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 * ** • *Only the major subsidiaries of the Group are presented • ** AB Inbev acquired SABMiller plc and became the new indirect shareholder in Anadolu Efes through SABMiller Harmony Ltd., as of October 12, 2016 1) 20% held by TCCC (The Coca-Cola Export Cooperation)
Slide 4: Anadolu Efes at a Glance
Anadolu Efes at a Glance* Serving more than 670 mn people 16 16 countries; 15 Breweries & 25 Bottling Plants 11 o Europe’s 6th largest brewer 2005 2015 o World’s 12th largest brewer # of Countries** o 5th largest Coca-Cola bottler in the Cola system 670 World class brand portfolio in beer & soft dri
Slide 5: Consolidated Performance – 9M2016
Consolidated Performance – 9M2016 SALES VOLUME NET SALES REVENUE EBITDA (BNRI)* & EBITDA (BNRI) MARGIN 19.2% 18.7% mn TRL 8,265.0 mhl 70.4 8,260.0 1,547.7 69.8 1,586.1 mn TRL 9M2015 9M2016 9M2015 9M2016 9M2015 9M2016 BREAKDOWN** 7% due to rounding *Numbers may not add up to 100% 13% 20% 16% 18% 17%
Slide 6: 9M2016 Key Highlights
9M2016 Key Highlights Volume up 2.5% in 3Q2016 vs. 3Q2015 o Improvement in beer volumes both in Turkey & Russia in the 3Q vs. 1H2016 o 1.7% volume growth in soft drink business Revenue up 0.1%, slightly underperforming volumes; o Despite local currency price increases in all segments o Due to y-o-y
Slide 7: Strong Competitive Advantages
Strong Competitive Advantages Balanced Beer & Soft Drink Operations Strategic Partnership with SABM & TCCC Expertise & Know-how in driving cost efficiencies Strong regional player powered by proven local know-how 7
Slide 8: Solid Cash Flow Generation
Solid Cash Flow Generation TL million 8
Slide 9: Long Term Key Priorities
Long Term Key Priorities Continue to generate value by margin improvement and FCF generation through our priorities; o capitalizing on our strong brand portfolios o to achieve optimal brand & SKU mix o excelling in execution o focus on quality market share o strong cash flow generation with special
Slide 10: Beer Operations
ANADOLU EFES : eid BEER OPERATIONS
Slide 11: Beer Operations
Beer Operations * * * * * " * 39.5mhl of total beer capacity 11 * Value share **Nielsen, 2015
Slide 12: Markets with lower per capita consumption but high potential
Markets with lower low per per cap capita consumption consumption but high but high potential potential Operating markets with growth potential characterized by; o low per capita consumption o developing economies o young populations o westernization/urbanization • Efes operating countries 12 Source
Slide 13: Beer Group Strategy
ANADOLU Beer Group Strategy EFES te. | Provide choice and innovation to consumers: Bran DS Grow brand love Excel in customer collaboration, availability and XECUTION point of sale activation Build competitive advantage through lean FF i Cl E N CY and efficient operations Focus on employees, customer
Slide 14: Turkish Beer Market
Turkish Beer Market Low per capita consumption of 11 liters offering a growth potential Expected compounded annual growth rate of 2%* between 2016- 2020 Growing population with 1.3% annual growth rate 32% is below age 18 Returnable market enabling higher operational profitability Bottles & kegs
Slide 15: Efes Turkey
Efes Turkey Vertically integrated Market Leader with; o 4 Breweries - 9.5mhl total brewing capacity o 2 Malteries & 1 Hops Processing Facility o 67% market share* o 100% brand awareness for «Efes Pilsen» o Rich portfolio of local, imported & licensed brands covering all segments o # 1 in consumer sp
Slide 16: Russian Beer Market
Russian Beer Market World’s 4th largest beer market with total consumption of ~69mhl Expected compounded annual growth rate of 3%* between 2016-2020 Dominated by multinationals; o Top 4 accounting for ~ 75% of the market Share of Modern Trade above 60% - more than doubled in the last few years 16 *C
Slide 17: Efes Russia
Efes Russia #2 player with; o 6 Breweries – 30mhl total brewing capacity o 4 Malteries & 1 Preform Plant o AEFES’ largest beer market; 52% of total beer volumes from Russia o 15% market share* - #1 position in Premium category Volume Share** Value Share** - Numbers may not add up to 100% 14% 15% 2
Slide 18: Other International Beer Operations
Other International Beer Operations Market leader in; Kazakhstan Georgia Moldova Expected compounded annual growth rate of 2%* between 2016-2020 in Kazakshtan 18 *Canadean
Slide 19: Commitment to Environment
Commitment to Environment 19
Slide 20: Soft Drink Operations
SOFT DRINK OPERATIONS
Slide 21: CCI at a Glance
CCI at a Glance Market leader in Turkey with 64% & Kazakhstan with 50% market share #2 in Iraq with 31% & Pakistan with 36% market share 25 Bottling Plants in 10 Countries 5th largest Coca-Cola bottler in Cola system Annual capacity of 1.4bn uc 1.2bn uc sales volume 28bn annual servings 21
Slide 22: CCI at a Glance
CCI at a Glance Sources: IMF (GDP) and TCCC and CCI best estimates based on Nielsen and own market intelligence. 22 Note: Bubbles represent market size
Slide 23: Soft Drinks Business Strategic Priorities
Soft Drinks Business Strategic Priorities 23
Slide 24: Strong Brand Portfolio
Strong Brand Portfolio ANADOLU EFES BRAND & FLAVOR EXPANSION PACKAGE INNOVATION 2006 2015 Brands 17 30 Flavors 44 148 Differentiated package segmentation across channels, customers & consumers 24
Slide 25: Financials and Outlook
FINANCIALS AND OUTLOOK
Slide 26: Financial Highlights
Financial Highlights Turkey Beer International Beer Soft Drinks (TL mn) (USD mn) (TL mn) 9M2016 vs 9M2015 9M2016 vs 9M2015 9M2016 vs 9M2015 Volume (mhl) 4.6 -10.8% 11.0 -3.0% 965.1* 2.8% Net Sales 1,108.1 -5.3% 497.9 -18.4% 5,675.1 4.1% Gross Profit 655.8 -9.8% 228.2 -22.5% 1,979.2 1.5% EBIT (BNRI)
Slide 27: Balance Sheet Flexibility
Balance Sheet Flexibility 9M2016 Net Leverage Ratios are within comfortable area. Anadolu Efes Consolidated Beer Group 2.3 Net Debt / EBITDA (BNRI) 2.0 1.8 Net Leverage Ratio 1.9 1.8 1.6 times times 9M2015 2015 YE 9M2016 9M2015 2015 YE 9M2016 AEFES 9M2015 9M2016 BEER 9M2015 9M2016 TOTAL FINANCIAL DE
Slide 28: 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. 3.3 years 707 651 500 500 Schedule* Maturity 152 153 122 110 120120 87 65 86 36 56 37 37 43 2016 2017 2018 2019 2020 2021 2022 2023 BEER CCI
Slide 29: Interest Breakdown
Interest Breakdown Significant portion of debt is fixed, minimized interest rate risk Anadolu Efes Beer Group 9M2015 9M2016 9M2015 9M2016 27% 21% 29% 26% 71% 74% 73% 79% Fixed Floating Fixed Floating 29
Slide 30: Beer Group 2016 Guidance
Beer Group 2016 Guidance Turkey beer market decline mid-single digit Efes Turkey volume decline mid-to-high single digit Russian beer market decline low-to-mid-single digit EFES RUS volume outperform the market Total beer volume decline at a rate of low-single digits Revenue lower decline compared t
Slide 31: Soft Drink Operations 2016 Guidance
Soft Drink Operations 2016 Guidance Turkey volume grow low single digit International volume grow low-mid single digits Consolidated volume grow at low-mid single digits Net sales revenue ahead of volume growth EBITDA margin flat FCF significant positive FCF 31
Slide 32: Consolidated 2016 Guidance
Consolidated 2016 Guidance Sales volumes grow low-single digit Sales revenues grow mid-single digits EBITDA (BNRI) grow in abs. terms EBITDA (BNRI) margin flattish to slightly lower margin Capex/net sales high-single digit FCF higher in absolute terms 32
Slide 33: Financial Priorities
Financial Priorities Sustain consolidated cash flows through; o focus on working capital optimization o optimized capex policy o sticking to tight balance sheet management Deleveraging Efficiency improvements via savings Managing impact of F/X volatility on operations Commitment to Investment Grade
Slide 34: Consolidated Performance - FY2015
Consolidated Performance - FY2015 SALES VOLUME NET SALES REVENUE EBITDA (BNRI) & EBITDA (BNRI) MARGIN 17.3% 17.2% mn TRL 10.205,1 mn TRL 88.7 86.1 10,021.4 mhl 1,720.9 1.766,1 FY2014 FY2015 FY2014 FY2015 FY2014 FY2015 BREAKDOWN 8% 15% due to rounding *Numbers may not add up to 100% 24% 16% 19% 76% 1
Slide 35: Financial Highlights – FY2015
Financial Highlights – FY2015 Turkey Beer International Beer CCI (mn TL) (mn USD) (mn TL) FY2015 vs FY2014 FY2015 vs FY2014 FY2015 vs FY2014 Volume (mhl) 6.6 -6.3% 14.1 -19.0% 1,151.9** 1.9% Net Sales 1,484.8 -0.3% 725.1 -37.3% 6,723.9 12.3% Gross Profit 908.1 -3.6% 345.7 -35.4% 2,334.4 7.0% EBIT (B