Coca-Cola Icecek A.S. · BIST:CCOLA
Coca-Cola Icecek A.S — TEB Investment Conference 2013
37 slides from Coca-Cola Icecek A.S's conference presentation, Mar 4, 2013
Slide 1: TEB Investment Conference
TEB Investment Conference March 4 Frankfurt
Slide 2: Business Overview & Strategy
Business Overview & Strategy 2012 Operational Review 9M12 Financial Review Going Forward Appendix
Slide 3: We are…
We are… Operating in one of the world’s most dynamic and exciting markets 2004-2011 CAGR: Sales volume: 15.6% Net Sales: 16.7% EBITDA: 19.2% 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
Slide 4: …capitalizing on favorable demand and demographic drivers…
…capitalizing on favorable demand and demographic drivers… Per Cap Consumption in Liters (2011) 180 Mexico 160 USA 140 Argentina 120 Germany 100 Kuwait Bulgaria UK 80 Saudi Arabia U.A.E Spain S. Africa Hungary 60 Oman Libya Poland Greece Jordan Turkey Qatar Italy 40 Egypt Russia Iraq Kazakhstan Syri
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) 356 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 33% Turkey 67% 2005 2012 2005 2011* Volume split (uc) - Category EBITDA Split Tea Int'l 8% 15% Int'l Still 26% 22% Sparkling 70% Turkey Turkey 85% 74% 2005 2012 2005 2011* 6 Volume numbers were disclos
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 70% 28% 37% 57% #1 #2 #1 #1 25% 1% 7% 5% #1 #8 #3 #5 9% 11% 8% 51% #2 #3 #3 #1 Source: Nielsen 9
Slide 10: 2012 Operational Review
Business Overview & Strategy 2012 Operational Review 9M12 Financial Review Going Forward Appendix
Slide 11: Volume up by 12% in 2012
Volume up by 12% in 2012 Turkey Volume International Volume Consolidated Volume (Unit cases in millions) (Unit cases in millions) (Unit cases in millions) 546.8 568.6 850.6 761.8 282.0 215.0 2011 2012 2011 2012 2011 2012 Consolidated up by 23.6% to 173.8 million uc 4Q12 Turkey up by 12.5% to 109.0 m
Slide 12: 2012 Sales Volume Breakdown
2012 Sales Volume Breakdown Volume split (uc) - Volume split (uc) - Geography Category 2011 2011 Int'l Tea Consolidated sales 28.2% 8.3% Still volume increased by 20.9% Turkey 71.8% Sparkling 70.8% 11.7% in 2012 Sparking category grew at low double 2012 2012 digits Tea Int'l 7.9% Still category
Slide 13: Turkey
Turkey Turkey volume up 4% in 2012 Sparkling up low single digits Still category up low double digits Tea category up mid-single digits Focus on portfolio optimization 13
Slide 14: International Operations
International Operations International Volume Split 2012 All key markets posted strong Pakistan Kazakhstan 30% 25% volume growth in 2012 Syria Pakistan volume growth 23% 0% Kyrgyzstan 4% Kazakhstan growth 32% Tajikistan 0% Azerbaijan Iraq 14% Azerbaijan growth 20% 15% Jordan Turkmenistan 5% 7%
Slide 15: Product Introductions
Product Introductions Coca-Cola, Fanta, Sprite Coca-Cola, Fanta PET 1L Coca-Cola OWB PET 300ml and Coke Zero Coca-Cola Fanta PET and slim can Pakistan 250ml Coca-Cola PET Kyrgyzstan PET 1, 1.5, Tangerine 200 ml 2.25L Turkmenistan 2.5L Iraq Kazakhstan Turkey Azerbaijan Jordan Fuse-tea Cappy Premium C
Slide 16: 9M12 Financial Review
Business Overview & Strategy 2012 Operational Review 9M12 Financial Review Going Forward Appendix
Slide 17: Net sales up by 20% in 9M12
Net sales up by 20% in 9M12 Turkey Net Sales International Net Sales Consolidated Net Sales (TL in millions) (US$ in millions) (TL in millions) 3,287.5 2,026.5 2,221.8 597.4 2,738.0 455.3 9M11 9M12 9M11 9M12 9M11 9M12 Consolidated up by 16.3% to TL 1,376.5 million 3Q12 Turkey up by 9.8% to TL 927.7
Slide 18: EBITDA up by 42% in 9M12
EBITDA up by 42% in 9M12 Turkey Turkey EBITDA EBITDA International EBITDA Consolidated EBITDA (TL in millions) 17.9% (US$ in millions) (TL in millions) 15.6% * 20.3% * 18.6% 15.7% * 15.5% 610.5 121.3 398.8 315.1 428.5 70.6 9M11 9M12 9M11 9M12 9M11 9M12 Consolidated up by 39.2% to TL 285.0 million 3Q
Slide 19: Financial Expenses
Financial Expenses 9M11 9M12 Interest income 26.2 21.7 Interest expense (-) (43.5) (40.9) Foreign exchange gain / (loss) 20.0 (24.3) Unrealized FX gain / (loss) - Borrowings (128.2) 58.1 Gain / (loss) on derivative transactions (0.1) 0.0 Financial Income / (Expense) Net (125.9) 14.6 *mn TL 19
Slide 20: Debt Structure
Debt Structure 9M12 FY11 Change% USD denominated* 823 773 6% EURO denominated* 50 43 18% TL denominated 0 0 n.m. Other (in USD terms) 33 36 (11%) Total Financial Debt in TL 1,645 1,634 1% Total Cash & Equivalent in TL 625 526 19% Net Debt in TL 1,019 1,108 (8%) Net Debt in US$ 571 587 (3%) Maturity
Slide 21: Going Forward
Business Overview & Strategy 2012 Operational Review 9M12 Financial Review Going Forward Appendix
Slide 22: 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 23: Appendix
Appendix Financial Statements 2011 Financial Leverage 2011 Corporate Structure Country Data Building a Sustainable Growth Business Turkey AFB Market Tea Market Segments in Turkey Trade Structure in Turkey
Slide 24: 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 2011 1.8889 2011 1.6708 Reporting December 31, December 31, TL USD Currency 2010 1.5460 2010 1.4990 Presentation ∆ 22.2% ∆ 11.
Slide 25: Income Statement - Consolidated
Income Statement - Consolidated (TL mn) 2010 2011 2011 vs 2010 Volume (m/uc) 665.4 761.7 14.5% Net Sales 2,753.2 3,408.6 23.8% COGS (1,721.6) (2,145.8) 24.6% Gross Profit 1,031.5 1,262.8 22,.% OPEX (750.1) (939.8) 25.3% Other Inc/Exp (Net) (9.6) 5.4 n.m EBIT 271.8 328.3 20.8% EBIT (exc. other) 281.4
Slide 26: Income Statement - Turkey
Income Statement - Turkey (TL mn) 2010 2011 2011 vs 2010 Volume (m/uc) 494.4 546.8 10.6% Net Sales 2,121.4 2,472.8 16.6% COGS (1,277.5) (1,476.1) 15.5% Gross Profit 843.9 996.7 18.1% OPEX (609.7) (752.2) 23.4% Other Inc/Exp (Net) 6.1 23.5 n.m EBIT 240.3 267.9 11.5% EBIT (exc. other) 234.1 244.4 4.4%
Slide 27: Income Statement - International
Income Statement - International (USD mn) 2010 2011 2011 vs 2010 Volume (m/uc) 171.0 215.0 25.7% Net Sales 422.8 576.2 36.3% COGS (298.1) (417.1) 39.9% Gross Profit 124.8 159.2 27.6% OPEX (95.9) (115.4) 20.4% Other Inc/Exp (Net) (0.3) 1.6 n.m EBIT 28.6 45.4 58.5% EBIT (exc. other) 28.9 43.8 51.4% In
Slide 28: Balance Sheet – FY11/FY10
Balance Sheet – FY11/FY10 December December 31, December December 31, 2010 (TL million) 31, 2011 2011 31, 2010 (TL million) (audited) (audited) (audited) (audited) Cash & Cash Equivalents 522.2 491.7 ST Borrowings 125.4 627.7 Investments in Securities 3.8 107.1 Trade Payables 185.9 99.3 Trade Receiv
Slide 29: Free Cash Flow
Free Cash Flow (TL mn) 2011 2010 Cash Flow From Operating Activities Net Income Adj for Non-Cash Items 533.5 459.2 Interest Paid (51.8) (48.1) Interest Received 31.4 38.5 Taxes Paid (30.0) (60.3) Employee Termination Benefits, (33.8) (22.1) Vacation Pay, Mngmt Bonus Operating Cash Flow 449.2 367.2 2
Slide 30: Financial Leverage and FCF
Financial Leverage and FCF Net Debt/EBITDA Capex/Net Sales FCF (Including – acquisitions) (TL million) 2.3x 14.6% 111 1.5x 5.8% FY10 FY11 FY10 FY11 FY10 FY11 (212) 30
Slide 31: Corporate Structure
Corporate Structure Coca-Cola İçecek A.Ş. 100.00% Tonus Joint Stock Company, CCI International Holland B.V. 94.23% Coca-Cola Satış ve Dağıtım Kazakhstan The Netherlands 99.96% A.Ş., Turkey 4.85% Coca-Cola Almaty Bottlers 46.38% LLP, Kazakhstan 48.77% Mahmudiye Kaynak Suyu 99.96%* 99.99% Ltd. Şti., T
Slide 32: Country Data
Country Data % of Per capita CCI’s market Population GDP per capita CCI’s 2012 population consumption of share in (mn) in 2011 in 2011 Volume below 30 sparkling bev. sparkling bev. (2) ($) (3) Breakdown years (2) (L) in 2011 (4) in 2011 (5) Turkey 74.3(1) 51% 10,576 45 70% 66.8% Pakistan 177.8 65% 1
Slide 33: 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 34: Turkey AFB Market
Turkey AFB Market AFB Market (exc. milk) RTD AFB Market (exc. milk) 5.2 billion uc 1.3 billion uc Sparkling Tea Other Water 46.4% 2% 5% Ayran 2% RTD AFB Fruit 26.0% Juices&Still Drinks 12% Sparkling Powder& Beverages Concentrate 44% 0.4% Hot Coffee 2.5% Bottled Water HOD 35% 24.8% Source: Canadean,
Slide 35: Tea Market Segments in Turkey
Tea Market Segments in Turkey Volume Value * 2.7 bn uc 0.8 bn $ Demlik çay Poşet çay Demlik çay Poşet çay %4 %1 %8 %5 Dökme çay Dökme çay %95 %87 Source: Nielsen, 2011 Source: Nielsen, 2011 Very high levels of hot tea consumption • Has the highest share of throat after tap water • 95% of Turkish peo
Slide 36: Trade Structure in Turkey
Trade Structure in Turkey Retail Volume by Channel (2011) Other 6% Gas Station 2% Hypermarket 2% Discount Store 5% On Premise Traditional 16% Grocery 47% Supermarket 23% Half of volume delivered by traditional trade channels Highest retail coverage among all FMCG categories in Turkey *Other includes
Slide 37: 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
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