Coca-Cola Icecek A.S. · BIST:CCOLA
Coca-Cola Icecek A.S — UBS Emerging Market Conference 2013
39 slides from Coca-Cola Icecek A.S's conference presentation, May 13, 2013
Slide 1: UBS Emerging Market Conference
UBS Emerging Market Conference May 13, 2013 London
Slide 2: Business Overview & Strategy
Business Overview & Strategy 1Q13 Operational Review 1Q13 Financial Review Going Forward Appendix
Slide 3: We are…
We are… Operating in one of the world’s most dynamic and exciting markets 2004-2012 CAGR: Sales volume: 15% Net Sales: 19% EBITDA: 22% A gateway to Turkey, Pakistan, Central Shareholder Structure Asia and Middle East Serving more than 360 million of people; 60% of our population is below 30 ye
Slide 4: …capitalizing on favorable demand and demographic drivers…
…capitalizing on favorable demand and demographic drivers… Per Cap Consumption in Liters (2012) Median Age CCI territory total population: over 360 million Source: CCI and United Nations 4
Slide 5: …allowing us to expand successfully…
…allowing us to expand succesfully… # of Countries 318 mn UC 850 mn UC 10 S.Iraq - 2012 1 Pakistan - 2008 2004 2012 Syria - 2007 Population Served N. Iraq - 2006 (mn) 360 71 275 mn UC 2004 2012 Operating Plants 22 5 2004 2005 2012 2004 2012 5
Slide 6: …diversifying across geographies and categories.
…diversifying across geographies and categories. Volume split (uc) - Geography Revenue Split Int'l Int'l 33% 33% Turkey Turkey 67% 67% 2005 2012 2005 2012 Volume split (uc) - Category EBITDA Split Tea Int'l 8% 15% Int'l Still 37% 22% Sparkling 70% Turkey Turkey 85% 63% 2005 2012 2005 2012 6
Slide 7: Our operating model entails…
Our operating model entails… Management of diversity Local relevance Empowerment Local accountability Leverage technology for customer service 7 7
Slide 8: …so that we inspire consumers, customers and people…
…so that we inspire consumers, customers and people… Consumers Fulfillment Innovation Customers R elationship Serve Trust HIGH-PERFORMANCE People EMPOWERMENT 8 2012 ALIGNMENT 2020
Slide 9: …and enjoy strong positions in key markets.
…and enjoy strong positions in key markets. Turkey * Pakistan Kazakhstan Azerbaijan 67% 29% 42% 59% #1 #2 #1 #1 25% 2% 19% 13% #1 #8 #1 #2 7% 10% 8% 50% #3 #3 #3 #1 Source: Nielsen * Market share numbers are restated due to a change in forecasting universe 9
Slide 10: Business Overview & Strategy
Business Overview & Strategy 1Q13 Operational Review 1Q13 Financial Review Going Forward Appendix
Slide 11: 1Q13 Review
1Q13 Review Double digit volume and revenue growth Net revenue per case up 4% Favorable cost environment Improved operating margins
Slide 12: Volume up by 20% in 1Q13
Volume up by 20% in 1Q13 Turkey Volume International Volume Consolidated Volume (Unit cases in millions) (Unit cases in millions) (Unit cases in millions) 108.0 116.1 197.7 165.0 81.7 57.0 1Q12 1Q13 1Q12 1Q13 1Q12 1Q13 12
Slide 13: 1Q13 Sales Volume Breakdown
1Q13 Sales Volume Breakdown Volume split (uc) - Volume split (uc) - Geography Category 1Q13 1Q13 Tea 11% Turkey Still 59% Int. 22% 41% Sparkling 67% 13
Slide 14: Turkey Product introductions
Turkey Product introductions Coca-Cola, Coca-Cola Light, Coca-Cola Zero, Fanta, Sprite, Can 250 ml Strong sparkling category growth Cappy Pulpy Coke Zero re-launch Lemonade, 1lt Coca-Cola Zero Sprite 1.5lt 1.75lt New launches addressing IC consumption Promotions 14
Slide 15: International Operations Product introductions
International Operations introductions Product Strong local marketing Jordan Central Asia Coca-Cola Can 355 Bonaqua Pet 500ml,1 L,1.5L ml campaigns Increased market penetration Coke studio now in Iraq and Jordan Promotions
Slide 16: International Operations
International Operations International Volume Split 1Q13 Kazakhstan 20% Kyrgyzstan Kazakhstan 3% +%37% Pakistan Azerbaijan 40% 6% Azerbaijan +27% Turkmenistan 5% Jordan 3% Syria Iraq 0% Iraq +215% Tajikistan 22% 0% Pakistan +17% 16
Slide 17: Business Overview & Strategy
Business Overview & Strategy 1Q13 Operational Review 1Q13 Financial Review Going Forward Appendix
Slide 18: Net sales up by 25% in 1Q13
Net sales up by 25% in 1Q13 Turkey Net Sales International Net Sales Consolidated Net Sales (TL in millions) (US$ in millions) (TL in millions) 917.3 476.6 553.2 205.0 736.6 146.6 1Q12 1Q13 1Q12 1Q13 1Q12 1Q13 18
Slide 19: EBITDA (Excl. other) up by 55.4% in 1Q13 - Proforma
EBITDA (Excl. other) up by 55.4% in 1Q13 - Proforma Turkey Turkey EBITDA EBITDA International EBITDA Consolidated EBITDA (TL in millions) 13.6% (US$ in millions) (TL in millions) 12.5% * 13.2% * 13.9% 11.1% * 4.1% 127.1 27.1 75.4 59.7 81.8 5.9 1Q12 1Q13 1Q12 1Q13 1Q12 1Q13 *EBITDA Margin 19
Slide 20: Financial Expenses - Proforma
Financial Expenses - Proforma 1Q13 1Q12 Interest income 9.1 7.9 Interest expense (-) (19.5) (16.0) Foreign exchange gain / (loss) 1.0 (23.1) Unrealized FX gain / (loss) - Borrowings (12.1) 60.7 Gain / (loss) on derivative transactions (0) (0) Financial Income / (Expense) Net (21.7) 29.5 *mn TL 20
Slide 21: Debt Structure - Proforma
Debt Structure - Proforma 1Q13 FY12 Change% USD denominated* 871 852 2% EURO denominated* 46 51 -7% TL denominated 34 35 -4% Other (in USD terms) 87 84 4% Total Financial Debt in TL 1,875 1,822 3% Total Cash & Equivalent in TL 512 608 (16%) Net Debt in TL 1,363 1,215 12% Net Debt in US$ 754 681 11%
Slide 22: Business Overview & Strategy
Business Overview & Strategy 1Q13 Operational Review 1Q13 Financial Review Going Forward Appendix
Slide 23: Going Forward
Going Forward Accelerate revenue and margins in International, focus on Iraq and Pakistan Grow the sparkling category and per caps in Turkey Improve Balance Sheet health every year Continue to build and enhance our reputation Build a world class organization EBITDA Growth>Net Revenue Growth>Volume G
Slide 24: 2013 Guidance
2013 Guidance Consolidated volume is to grow Turkey volume up at mid to high single digit growth Int’l volume up at mid to high teens (organic basis) Net revenue growth > volume growth EBITDA growth ≥ Net revenue growth 24
Slide 25: Appendix
Appendix Financial Statements 2012 Financial Leverage 2012 Corporate Structure Country Data Building a Sustainable Growth Business Turkey AFB Market Tea Market Segments in Turkey Trade Structure in Turkey
Slide 26: Introduction to Financial Statements
Introduction to Financial Statements Basis of Preparation Consolidated / TL/$ TL/$ International Turkey Year-End Average Functional TL USD December 31, December 31, Currency 2012 1.7826 2012 1.7922 Reporting December 31, December 31, TL USD Currency 2011 1.8889 2011 1.6708 Presentation ∆ -5.6% ∆ 7.3
Slide 27: Income Statement - Consolidated
Income Statement - Consolidated (TL mn) 2012 2011 Change % Volume (m/uc) 850.5 761.7 11.7% Net Sales 4,132.4 3,408.6 21.2% COGS (2,543.9) (2,145.8) 18.6% Gross Profit 1,588.5 1,262.8 25.8% OPEX (1,113.1) (939.9) 18.4% Other Inc/Exp (Net) (1.2) 5.4 (121.8%) EBIT 474.2 328.3 44.4% EBIT (exc. other) 47
Slide 28: Income Statement - Turkey
Income Statement - Turkey (TL mn) 2012 2011 Change % Volume (m/uc) 568.5 546.8 4.0% Net Sales 2,757.6 2,472.8 11.5% COGS (1,604.6) (1,476.1) 8.7% Gross Profit 1,152.9 996.7 15.7% OPEX (852.5) (752.2) 13.3% Other Inc/Exp (Net) 10.8 23.5 (54.3%) EBIT 311.2 267.9 16.2% EBIT (exc. other) 300.4 244.4 22.
Slide 29: Income Statement - International
Income Statement - International (USD mn) 2012 2011 Change % Volume (m/uc) 282.0 215.0 31.2% Net Sales 770.6 576.2 33.7% COGS (528.0) (417.1) 26.6% Gross Profit 242.7 159.2 52.4% OPEX (150.4) (115.4) 30.3% Other Inc/Exp (Net) 1.8 1.6 8.7% EBIT 94.0 45.4 107.1% EBIT (exc. other) 92.2 43.8 110.7% Inco
Slide 30: Balance Sheet – FY12/FY11
Balance Sheet – FY12/FY11 December December 31, December December 31, 2011 (TL million) 31, 2012 2012 31, 2011 (TL million) (audited) (audited) (audited) (audited) Cash & Cash Equivalents 489.9 522.2 ST Borrowings 229.3 125.4 Investments in Securities 118.0 3.8 Trade Payables 184.4 185.9 Trade Recei
Slide 31: Free Cash Flow
Free Cash Flow (TL mn) 2012 2011 Cash Flow From Operating Activities Net Income Adj for Non-Cash Items 696.8 533.5 Interest Paid (53.9) (51.8) Interest Received 31.5 31.4 Taxes Paid (102.1) (30.0) Employee Termination Benefits, (40.2) (33.8) Vacation Pay, Mngmt Bonus Operating Cash Flow 532.1 449.2
Slide 32: Financial Leverage and FCF
Financial Leverage and FCF Net Debt/EBITDA Capex/Net Sales (Excluding – acquisitions) 2.3x 14.0% 14.6% 1.6x FY11 FY12 FY11 FY12 14.6% FCF ROIC (Excluding – acquisitions) (TL million) 11.3% (mn TL) 154 9.6% FY11 (mn TL) FY12 FY11 FY12 (212) 32
Slide 33: Corporate Structure
Corporate Structure Coca-Cola İçecek A.Ş. 100.00% Tonus Turkish-Kazakh Joint 99.23% Venture LLP, CCI International Holland B.V. Coca-Cola Satış ve Dağıtım The Netherlands 99.96% Kazakhstan A.Ş., Turkey 4.85% J.V. Coca-Cola Almaty Bottlers 46.38% LLP, Kazakhstan 48.77% Mahmudiye Kaynak Suyu 99.96%* 9
Slide 34: Country Data
Country Data % of Per capita CCI’s market Population GDP per capita CCI’s 2012 population consumption of share in (mn) in 2012 in 2012 Volume below 30 sparkling bev. sparkling bev. (2) ($) (2) Breakdown years (3) (L) in 2012 (4) in 2012 (5) Turkey 75.6(1) 51% 15,029 45 67% 66.8% Pakistan 181.1 64% 2
Slide 35: Building a Sustainable Growth Business
Building a Sustainable Growth Business CCI Turkey CCI Ankara Plant Best Country Bottling Operation at Quality Achievement Reward at 2009 TCCC EAG President’s 2011 TCCC EAG National Quality Environment Awards Awards Water usage ratio Energy usage ratio (lt water/lt product) (MJ lt of product) 2005 20
Slide 36: Turkey AFB Market
Turkey AFB Market AFB Market (exc. milk) RTD AFB Market (exc. milk) 5.5 billion uc 1.5 billion uc Tea Sparkling Other 44.4% Water 2.9% 6.7% Sparkling Ayran Beverages 9.9% 38.7% RTD AFB 28.2% owder&Concentrat e Hot Coffee Fruit 1.6% 2.4% Juices&Still HOD Drinks 23.4% 10.2% Bottled Water 31.5% Source:
Slide 37: Tea Market Segments in Turkey
Tea Market Segments in Turkey Volume Value * 3.2 bn uc 0.9 bn $ Teapotbag Teabag Teabag 4.8% 1.4% Teapotbag 5.3% 8.4% Loose Loose 93.8% 86.3% Source: Nielsen, 2012 Source: Nielsen, 2012 Very high levels of hot tea consumption • Has the highest share of throat after tap water • 95% of Turkish people
Slide 38: Trade Structure in Turkey
Trade Structure in Turkey Retail Volume by Channel (2012) Other 0% Gas Station 2% Hypermarket 2% Discount Store 5% On Premise 21% Traditional Grocery 47% Supermarket 23% Half of volume delivered by traditional trade channels Highest retail coverage among all FMCG categories in Turkey *Other includes
Slide 39: Glossary
Glossary AFB: Alcohol Free Beverages CAGR: Compound Annual Growth Rate CMB: Capital Markets Board of Turkey HOD: Home and Office delivery water OWB: One Way Bottle RTD: Ready-to-Drink Beverages UC: Unit Case (1 uc equals 5.678 liters) YTD: Year to Date Credit Rating Foreign Currency Senior Unsecured
Coca-Cola İçecek A.Ş. — UBS Emerging Market Conference 2013 on 6ix