Coca-Cola Icecek A.S. · BIST:CCOLA
Coca-Cola Icecek A.S — Non-Deal Roadshow (March 2017)
27 slides from Coca-Cola Icecek A.S's roadshow presentation, March 2017
Slide 1: Investor Presentation
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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 Introduction & Strategy 2016 Volume Performance 2016 Financials 3
Slide 4: A regional powerhouse...
A regional powerhouse... 24 plants TL 7 bn annual revenue 1.4 bn uc annual production capacity TL 1.1 bn annual EBITDA 5th largest bottler 26 bn annual servings 1.2 bn UC sales volume 380 million people 10 countries 4
Slide 5: ...expanding with a diversifying portfolio
...expanding with a diversifying portfolio Category Breakdown Geographical Breakdown Geographical Breakdown Kazakhstan Tea 8% 8% Other Pakistan Water Turkey 25% 15% Iraq 8% 15% 81% Others 8% 2006 Still 6% 2016 2006 2016 Sparkling 85% International 19% Sparkling 71% Turkey 51% 17 brands 34 brands 424
Slide 6: CCI is the fifth largest bottler today...
CCI is the fifth largest bottler today... Coca-Cola European Partners* Coca-Cola HBC Revenue: USD 11.4 bn Volume: 2.0 bn uc Revenue: USD 6.9 bn Coca-Cola Icecek Volume: 1.2 bn uc Revenue: USD 2.3 bn Coca-Cola Femsa Volume: 3.3 bn uc Revenue: USD 9.5 bn Coca-Cola Arca Volume: 1.7 bn uc Revenue: USD 5
Slide 7: ...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 8: ... 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% 8
Slide 9: 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 10: and create shareholder value
and create shareholder value Volume Revenue EBITDA Profitable growth 11% 17% 17% CAGR 2009-2016 CAGR 2009-2016 CAGR 2009-2016 Cost CapEx/Sales OPEX/Sales efficient 10% 25% in 2016 vs. expansion 28% in 2009 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 Average 2009-2
Slide 11: Volume growth in another challenging year
Volume growth in another challenging year Turkey Volume International Volume Consolidated Volume • Weak consumer sentiment & tourism activity in Turkey + 3.2% • Gradual recovery in Central Asia + 1.4% + 5.2% 1189 1152 • Difficult macroeconomic 601 593 588 conditions and ongoing security issues in Ir
Slide 12: Successful campaigns & promotions to support volumes in Turkey
Successful campaigns & promotions to support volumes in Turkey Volume Volume +1% +2% in in 4Q16 FY16 Sparkling - 2% in FY16 • Lower consumer confidence and weaker tourism activity Stills IC share in • Sparkling transactions lagging behind volume due to higher FC growth + 7% sparkling in FY16 20% in
Slide 13: Pakistan delivers double digit volume growth
Pakistan delivers double digit volume growth Strong 37% market Brand share in Coke Pakistan growth Pakistan volume + 19% in FY16 • In Pakistan, successful campaigns brought incremental 47 mn uc volume in 2016 Total Iraq Jordan volume volume • Effective discount management and revenue growth initiati
Slide 14: Central Asia turns positive in 4Q
Central Asia turns positive in 4Q Central Asia Turkmenistan volume +8% volume +4% in in 4Q16 FY16 Kazakhstan volume +14% in 4Q16 • Central Asia volumes contracted by 10% in FY16 Double digit Kyrgyzstan • Kazakhstan volume contracted by 7% in FY16, while recovery in oil prices has volume +5% in volum
Slide 15: Financial metrics on track
Financial metrics on track Volume Net Revenue EBITDA 1.189 mn uc TL 7.050 bn TL 1.093 mn +3.2% vs. 2015 +4.9% vs. 2015 +3.9% vs. 2015 OPEX Capex / Sales FCF Margin 25.0% 7.3% TL 642 mn vs. +0.2pp vs. 2015 -5.0pp vs. 2015 TL 46 mn in 2015 15
Slide 16: Consolidated net revenue per uc up by 2%
Consolidated net revenue per uc up by 2% Net revenue per uc up by 6% in Turkey 2015 2016 Δ% • 8.5% consumer inflation in 2016 Turkey Volume (mn uc) 593 601 1% • Price increases on selective FC packages in early 2016 Net revenue per uc (TL) 5.68 5.99 6% • Some dilutive impact due to higher share of F
Slide 17: FX headwinds and one-off impact on gross margin
FX headwinds and one-off impact on gross margin Gross margin contracted in Turkey: 2015 2016 Δ% • Adverse impact of FX rate on packaging materials Turkey Cost per uc (TL) 3.45 3.75 9% • One-off costs related to the collective bargaining agreement Gross Margin (%) 39.2% 37.4% (180 bps) Gross margin r
Slide 18: Successful cost management initiatives
Successful cost management initiatives Turkey: 2015 2016 Δ% Turkey • Lower operating expenses / net sales revenue Opex per uc (TL) 1.72 1.80 5% • EBITDA margin contraction due to lower gross margin EBITDA Margin (%) 15.6% 14.3% (130 bps) International: International • Effective cost management Opex
Slide 19: Strong cash delivery with working capital efficiency
Strong cash delivery with working capital efficiency NWC / Sales CapEx / Sales • Substantial free cash flow generation 11.3% 12.3% 12.3% 10.4% • FCF / Net Sales increased to 9% from 1% a year ago 7.4% 7.3% 2014 2015 2016 2014 2015 2016 FCF (TL mn) • Declining trend in net working capital / sales con
Slide 20: No major financing needs in 2017
No major financing needs in 2017 Financial debt (US$ million) Net FX Loss (TL mn) Maturity (US$ million) 1.160 1.071 7% 4% 2015 2016 705 17% USD 500m 16% Eurobond + (293) USD 100m USPP 77% 79% 120 (368) 104 108 35 2015 2016 2017 2018 2019 2020 2023 USD EUR TL & JD & KT & PKR Working on loan portfoli
Slide 21: Financial leverage ratios continue improving
Financial leverage ratios continue improving Net Debt (USD million) Net Debt / EBITDA Net Interest Coverage Ratio 7.4 812 816 6.6 2.26 5.8 1.96 2.10 652 2014 2015 2016 2014 2015 2016 2014 2015 2016 Continuing to deleverage Net Debt/EBITDA to be below 2x in 2017 Recovery in interest coverage 21
Slide 22: 2017 Guidance
2017 Guidance Sales Volume: • Consolidated: mid-single digit growth • Turkey: low-single digit growth • International: high-single digit growth Financials: • Net Revenue growth expected to exceed volume growth • Flat to slight improvement in EBITDA margin, compared to 2016 • Capex to Sales ratio of
Slide 23: Appendix
Appendix23
Slide 24: 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 performanc
Slide 25: Country Data - 2016
Country Data - 2016 Per Capita Percentage of CCI's Market Share CCC's Ranking in Population (2016) GDP per Capita Consumption of people below the in Sparkling Sparkling (mn) (PPP)(2016 est) (1) Sparkling age of 30 (2015) Beverages (2) Beverages Beverages (L) Turkey 79.0 48% $21,100 39 64.1 1 Pakista
Slide 26: Ratings
Ratings Credit Ratings Long Term Issuer Rating, ‘Baa3’, Stable Outlook (Moody’s rating, September 27, 2016) Long Term Foreign Currency IDR, ‘BBB-’ Stable Outlook (Fitch Rating, February 1, 2017) Corporate Governance Rating 9.45 out of 10 (Saha Rating, July 1, 2016) 26
Slide 27: CCI Investor Relations
CCI Investor Relations Tel: +90 216 528 4000 Fax: +90 216 365 8457 CCI-IR@cci.com.tr www.cci.com.tr ------------------------------------ Deniz Can Yücel Head of Investor Relations Tel: +90 216 528 3386 deniz.yucel@cci.com.tr Borsa Istanbul: CCOLA.IS - Bloomberg: CCOLA TI - Reuters: CCOLA.IS ADR-OTC: