Anadolu Efes Biracilik Ve Malt Sanayii A.s. · BIST:AEFES
Anadolu Efes Biracilik Ve Malt Sanayii A.s — Anadolu Efes — FY2017 Earnings Presentation
33 slides from Anadolu Efes Biracilik Ve Malt Sanayii A.s's earnings presentation, March 2018
Slide 1: Investor Presentation Post FY2017 Financials
v INVESTOR PRESENTATION Post FY2017 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 AB InBev 24% AG Anadolu Grubu Holding 43% Public 33% Harmony Ltd. BEER SOFT DRINK 50.3% OPERATIONS OPERATIONS TURKEY COCA-COLA BEER OPERATIONS İÇECEK1 (CCI) COCA-COLA OPERATIONS INTERNATIONAL BEER OPERATIONS 26.7% Public 3 (1) 20% held by TCCC (The Coca-Cola Export
Slide 4: Anadolu Efes at a Glance
ANADOLU EFES AT A GLANCE Serving more than 690 mn people 16 countries; 14 Breweries & 25 Bottling Plants 16 11 ◉ Europe’s 5th largest brewer ◉ World’s 15th largest brewer ◉ 6th largest Coca-Cola bottler in the Cola system 2005 2017 # of Countries* World class brand portfolio in beer & soft drinks St
Slide 5: Highlights of 2017
Hightlights of 2017 Solid volume growth through strong performance of international beer operations and soft drinks up 3.8% in 4Q2017 y-o-y up 4.4% in FY2017 Efficient revenue management enabling revenue growth ahead of volume up 28.0% in 4Q2017 y-o-y, highest quarterly growth since 2012 24.
Slide 6: Consolidated Performance – FY2017
Consolidated Performance – FY2017 EBITDA (BNRI) & SALES VOLUME NET SALES REVENUE FREE CASH FLOW EBITDA (BNRI) Margin 17,0% 17,2% mn TL mn TL mn TL 91,3 12.946,9 1.314,9 mhl 87,5 10.420,3 2.228,4 1.030,4 1.771,9 FY2016 FY2017 FY2016 FY2017 FY2016 FY2017 FY2016 FY2017 BREAKDOWN* SALES VOLUME NET SALES
Slide 7: Strong Competitive Advantages
STRONG COMPETITIVE ADVANTAGES ◉ Balanced Beer & Soft Drink Operations ◉ Strategic Partnership with AB InBev & 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 1315 1297 1030 1016 TL million 735 638 486 479 413 345 172 118 118 171 45 2010 2011 2012 2013 2014 2015 2016 2017 -138 FCF FCF (Including Investing Activities) 8
Slide 9: Long Term Key Priorities
LONG TERM KEY PRIORITIES Continue to generate value by margin improvement and FCF generation through our priorities ◉ Capitalizing on our strong brand portfolios Beer ◉ Achieving optimal brand & SKU mix ◉ Excelling in execution ◉ Focusing on quality market share ◉ Strong cash flow generation with sp
Slide 10: Anadolu Efes
ANADOLU
Slide 11: Beer Operations
BEER OPERATIONS RUSSIA #2 Brewer* #2 %15 Market Share MOLDOVA #1 #1 Brewer** KAZAKHSTAN #1 #1 Brewer* GEORGIA #1 #1 Brewer*** TURKEY #1 Brewer* %61 Market Share #1 11 * Volume share, Nielsen, FY2017 ** Company estimates *** Gamma Retail Audit
Slide 12: Markets with Low Per Capita Consumption and High Growth Potential
MARKETS WITH LOW PER CAPITA CONSUMPTION AND HIGH GROWTH POTENTIAL ◉ Operating markets with growth potential characterized by low per capita consumption young populations developing economies westernization/urbanization Per Capita CAGR Growth 2011-2016(%) 12% Efes Operating Countries 7% ROMAN
Slide 13: Beer Group Strategy
BEER GROUP STRATEGY BRANDS Provide choice and innovation to consumers: Grow brand love E XECUTION Excell in customer collaboration availability and point of sale activation E FFICIENCY Build competitive advantage through lean and efficient operations RELATIONS Focus on employees, customers, regulato
Slide 14: Turkish Beer Market
TURKISH BEER MARKET ◉ Low per capita consumption of 11 liters* offering a growth potential ◉ Growing population with 1.2% annual growth rate in 2017 47% is below age 30 ◉ Returnable market enabling higher operational profitability Bottles & kegs amount to more than half of total beer market 14 *
Slide 15: Efes Turkey
EFES TURKEY Low per capita consumption of 11 liters offering a growth potential ◉ 3 Breweries & 2 Malteries & 1 Hops Processing Facility ◉ 61% market share* ◉ 100% brand awareness for “Efes Pilsen” ◉ Rich portfolio of local, imported & licensed brands covering all segments ◉ # 1 in consumer spending
Slide 16: Russian Beer Market
RUSSIAN BEER MARKET ◉ World’s 5th largest beer market with total consumption of ~80 mhl ◉ Expected compounded annual growth rate of 2%* between 2017-2021 ◉ Dominated by multinational brewers Top 4 accounting for ~ more than 70% of the market ◉ Share of Modern Trade above 60% - more than doubled in
Slide 17: Efes Russia
EFES RUSSIA #2 player with; Efes RUSSIA ◉ 6 Breweries – 20.0 mhl total brewing capacity Efes RUSSIA 15% 15% ◉ 3 Malteries & 1 Preform Plant Carlsberg Carlsberg 31% 31% ◉ AEFES’ largest beer market; 55% of total beer volumes from Russia in FY2017 Inbev Inbev 11% 11% ◉ 15% overall market share* Heinek
Slide 18: Other International Beer Operations
OTHER INTERNATIONAL BEER OPERATIONS ◉ Market leader in Kazakhstan Georgia Moldova 18
Slide 19: Commitment to Environment
COMMITMENT TO ENVIRONMENT ENERGY AND EMISSIONS MANAGEMENT 15%+14% Compared to 2008, we consumed 15% less energy and generated 14% fewer emissions per unit product. OPERATIONAL RELIABILITY 50 Thousand Person Hours In 2016, we provided a total of more than 49.898 person hours of occupational health an
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Slide 21: CCI at a Glance
CCI AT A GLANCE ◉ Market leader in Turkey with 63% ◉ 25 Bottling Plants in 10 Countries & Kazakhstan with 49% market ◉ 6th largest Coca-Cola bottler in Cola system share ◉ Annual capacity of 1.5 bn uc ◉ #2 in Pakistan with 37% market ◉ 1.2bn uc sales volume share & #2 in Iraq 50.3% 20.1% 2.9% 26.7%
Slide 22: CCI at a Glance: Sparkling Beverage Consumption vs GDP
CCI AT A GLANCE 180 Sparkling Beverage Consumption vs GDP (2015) 150 Mexico USA Per Cap Consumption (liters) Argentina 120 Germany 90 UK Spain South Africa Saudi Arabia Bulgary 60 Hungary Oman Poland Jordan Iraq Turkey Kazakhstan Greece Turkmenistan Russia Italy CCI territory 30 Kyrgyzstan Egypt Tot
Slide 23: Soft Drinks Business Strategic Priorities
SOFT DRINKS BUSINESS STRATEGIC PRIORITIES 1 Accelarate Revenue and Margin Growth 2 Grow Sparkling Category and Per Caps 3 Selectively Expand Profitable Still Portfolio 4 Continue to Build and Enchance Our Reputation 5 Build a World Class Organisation 23
Slide 24: Strong Brand Portfolio
STRONG BRAND PORTFOLIO BRAND & FLAVOR EXPANSION PACKAGE INNOVATION 2006 2016 BRANDS 17 34 DIFFERENTIATED PACKAGE SEGMENTATION ACROSS CHANNELS, CUSTOMERS FLAVORS 44 150 & CONSUMERS 24
Slide 25: Financials and Outlook
ANADOLU EFES ~~. FINANCIALS AND OUTLOOK iN —
Slide 26: Financial Highlights
FINANCIAL HIGHLIGHTS TURKEY BEER INTERNATIONAL BEER CCI (TL mn) (TL mn) (TL mn) FY2017 vs FY2016 FY2017 vs FY2016 FY2017 vs FY2016 Volume (mhl) 5.8 (3.2%) 15.2 9.3% 1,237.5* 4.1% Net Sales 1,588.4 10.4% 2,806.8 47.5% 8,521.1 20.9% Gross Profit 940.5 10.2% 1,177.7 41.7% 2,901.3 21.3% EBIT (BNRI) 228.
Slide 27: Gross & Net Debt
GROSS & NET DEBT Anadolu Efes Consolidated Beer Group FY2016 FY2017 FY2016 FY2017 6,183.3 8,509.5 TOTAL FINANCIAL DEBT (m TL) 2,413.1 2,518.8 TOTAL FINANCIAL DEBT (m TL) TOTAL CASH & EQUIVALENTS (m TL) TOTAL CASH & EQUIVALENTS (m TL) 2,756.3 5,498.2 1,279.2 1,606.3 NET DEBT (m TL) 1,134.0 912.5 NET
Slide 28: Balance Sheet Flexibility
BALANCE SHEET FLEXIBILITY ◉ Significant FCF generation enabled substantial decrease in net indebtedness ◉ FY2017 Net Leverage Ratios are within comfortable area Net Leverage Ratio:Net Debt / EBITDA (BNRI) Anadolu Efes Consolidated Beer Group 1.9 ◉ 75% of cash is hold as hard 1.7 ◉ 68% of cash is hol
Slide 29: Borrowing Mix & Liquidity Profile
BORROWING MIX & LIQUIDITY PROFILE ◉ Easily manageable debt repayment schedule ◉ Weighted average maturity of debt for Beer Group is app. 4.0 years and 778 Anadolu Efes is app. 3.5 years 729 523 523 519 500 Maturity Schedule BEER CCI 153 141 141 110 AEFES 62 95 60 43 35 18 18 19 2018 2019 2020 20
Slide 30: Interest Breakdown
INTEREST BREAKDOWN ◉ Significant portion of debt is fixed, minimized interest rate risk ANADOLU EFES BEER GROUP Floating : 23% Floating : 15% Floating : 13% Floating : 9% Fixed : 77% Fixed : 85% Fixed : 87% Fixed : 91% FY2016 FY2017 FY2016 FY2017 30 30
Slide 31: 2018 Guidance
2018 GUIDANCE Sales Volume: Mid-single digits growth on a consolidated basis Total Beer: Flattish to low single digit growth Turkish beer market: Flattish- to low single digit growth Turkey own beer: In line with market Russian beer market: Flattish Russian own beer: In line with market Consolidated
Slide 32: Financial Priorities
FINANCIAL PRIORITIES ◉ Sustain consolidated cash flows through; ◉ Efficiency improvements via savings focus on working capital optimization ◉ Managing impact of F/X volatility on operations optimized capex policy ◉ Commitment to Investment Grade Ratings sticking to tight balance sheet manageme
Slide 33: Financial Highlights - FY2016
FINANCIAL HIGHLIGHTS - FY2016 TURKEY BEER INTERNATIONAL BEER CCI (TL mn) (USD mn) (TL mn) FY2016 vs FY2015 FY2016 vs FY2015 FY2016 vs FY2015 Volume (mhl) 6.0 -9.9% 13.9 -0.9% 1,189.1* 3.2% Net Sales 1,438.6 -3.1% 630.6 -13.0% 7,050.2 4.9% Gross Profit 853.5 -6.0% 275.4 -20.3% 2,392.5 2.5% EBIT (BNRI