Coca-Cola Icecek A.S. · BIST:CCOLA
Coca-Cola Icecek A.S — HSBC MENA & Turkey Equity Forum 2017
30 slides from Coca-Cola Icecek A.S's conference presentation, Feb 23, 2017
Slide 1: HSBC MENA & Turkey Equity Forum
HSBC MENA & Turkey Equity Forum 22 - 23 February 2017, Dubai
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 9M16 Financials* *FY16 results to be announced on March 1st 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: ...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 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 bn uc
Slide 7: ...as opportunites 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 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 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: Turkey’s volume up by 1% in 2016
Turkey’s volume up by 1% in 2016 Turkey Volume Growth • Lower consumer confidence and weaker tourism activity • Successful campaigns & promotions to support volumes • 1.8% 1.4% 2% volume growth in 4Q led by NRTD tea • 2% contraction in sparkling in FY16 4Q16 2016 • transactions lagging behind volume
Slide 13: Pakistan & Middle East posts 12% volume growth in 2016
Pakistan & Middle East posts 12% volume growth in 2016 Pakistan Volume Growth • Successful campaigns and new product launches in Pakistan 18.6% • Strong momentum in sparkling with Coca-Cola, Sprite and Fanta brands 13.1% • Effective management of discounts • Focus on revenue growth management 4Q16 2
Slide 14: Central Asia volume contracts by 10% in 2016
Central Asia volume contracts by 10% in 2016 Central Asia Volume Growth • Volume growth in 4Q following contraction in the previous 5 quarters 7.6% • Recovery in oil prices to stabilize volumes 4Q16 2016 • 14% volume growth in Kazakhstan in 4Q16 with 7% contraction in FY16 -9.6% • Double digit volum
Slide 15: All key metrics on track in 9M16
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 Focus on
Slide 16: 9M16 financial performance in our regions
9M16 financial 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 expa
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 to improve
Financial leverage ratios continue to improve 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: Net income increased due to lower FX losses
Net income increased due to 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
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 performanc
Slide 27: 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 28: 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 29: 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) 29
Slide 30: 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:
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