32 slides from Anadolu Efes Biracilik Ve Malt Sanayii A.s's earnings presentation, Aug 14, 2015
Slide 1: Anadolu Efes – 1H2015 Results Conference Call Presentation
ANADOLU EFES – 1H2015 Results Conference Call Presentation Damian Gammell - CEO Onur Çevikel - CFO August 14, 2015
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: General Overview & Operating Performance
General Overview & Operating Performance by Damian Gammell
Slide 4: 1H2015 Key Highlights
1H2015 Key Highlights Flat revenues y-o-y despite one-off factors, such as the Ramadan impact and destocking Net sales revenues impacted positively by; Price increases Positive product & packaging mix Better than expected improvement in margins of international beer segment Positive FCF
Slide 5: Consolidated Performance – 1H2015
Consolidated Performance – 1H2015 SALES VOLUME NET SALES REVENUE EBITDA (BNRI) 18.2% 17.9% 45.2 42.8 mn TRL mn TRL 5,123.5 934.7 906.2 mhl 5,074.7 1H2014 1H2015 1H2014 1H2015 1H2014 1H2015 Breakdown* 8% 18% 74% 15% 21% 64% 26% 17% 57% Turkey Beer International Beer Soft Drinks EBITDA margin was 17.9
Slide 6: Soft Drinks Volume Development
Soft Drinks Volume Development 567.8 561.5 270.7 276.7 mu/c 297.2 284.8 1H2014 1H2015 Turkey International Total Consolidated sales volume momentum improved in 2Q2015 as impact of high base of last year is easing gradually Volume performance in Turkey started showing signs of improvement in 2Q2015
Slide 7: Soft Drinks Strategy
Soft Drinks Strategy Accelerate Grow Selectively Continue to Build Revenue and Sparkling Expand Build and a World Class Margin Growth Category and Profitable Enhance our Organization Per Caps Still Portfolio Reputation aut : e Winning At The Point o of Sales a a a | @ Sales Force Effectiveness - SFE
Slide 8: Beer Volume Development
Beer Volume Development 7.9 Volumes contracted in 2Q2015 y-o-y 6.2 5.1 in Turkey due to some one-off 4.7 factors 5.8 4.4 mhl 3.7 3.2 We continued to beat our volume targets in our largest market Russia 2.1 1.9 in 2Q2015 1.5 1.5 1Q2014 1Q2015 2Q2014 2Q2015 Challenges in other international Turkey Bee
Slide 9: Beer Group Strategy
Beer Group Strategy RANDS XECUTION FFICIENCY ELATIONSHIPS ANADOLU EFES 9
Slide 10: Engaging With Our Key Stakeholders
Engaging With Our Key Stakeholders 10
Slide 11: Turkey Beer Operations
Turkey Beer Operations Volume Development Volumes contracted in 2Q2015 y-o-y mainly 3.5 3.4 due to; mhl 0.3 0.2 Earlier Ramadan impact Adverse weather conditions Slow-down in tourism activity 3.3 3.1 Higher shelf prices Competition 1H2014 1H2015 New launches in 1H2015 include; Domestic Sal
Slide 12: International Beer Operations
International Beer Operations Volume Development mhl 9.5 7.6 1H2014 1H2015 We continued to beat our volume targets in our largest market Russia in 2Q2015 Russian market also performed slightly better than we expected in 1H2015 We achieved stronger growth in our premium portfolio & increased value ge
Slide 13: 1H2015 Portfolio Expansion in Key Markets
1H2015 Portfolio Expansion in Key Markets Focused on occasions and portfolio opportunities in 1H2015 via new package introductions, flavor extensions and international brands Russia : ‘Beliy Medved Baskirskoe’ Beliy Medved Strong and Miller 1 lt Cans Miller 0.5 lt Can Kazakhstan: Affordable European
Slide 14: Solidified Market Position in Russia
Solidified Market Position in Russia Total beer market declined at high single digit level in Russia* in 1H2015 vs. 1H2014 Market share of Efes Russia was flat at 13.9% in 1H2015 vs 1H2014 Market Share* Other Other 24% 25% Heineken 12% Heineken 12% InBev 14% InBev 13% EFES RUS EFES RUS 14% 15% C
Slide 15: Financial Overview
Financial Overview by Onur Çevikel
Slide 16: Operational Snapshot – 1H2015 Performance
ANADOLU EFES CONSOLIDATED Operational Snapshot – 1H2015 Performance AEFES 1H2104 1H2015 Growth (%) Total Sales Volume (mhl) 45.2 42.8 -5.3% Net Sales (mn TRL) 5,123.5 5,074.7 -1.0% Gross Profit (mn TRL) 2,228.5 2,159.6 -3.1% Gross Profit margin (%) 43.5% 42.6% -94 bps EBITDA BNRI (mn TRL) 934.7 906.
Slide 17: Operational Snapshot – 1H2015 Performance: Beer Group
BEER GROUP Operational Snapshot – 1H2015 Performance Turkey Beer International Beer Beer Group (mn TRL) (mn USD) (mn TRL) 1H2015 vs. 1H2014 1H2015 vs. 1H2014 1H2015 vs. 1H2014 Net Sales 759.1 3.3% 413.5 -36.2% 1,829.0 -14.8% Gross Profit 468.8 -0.4% 195.9 -33.6% 976.7 -12.4% Gross Profit margin (%)
Slide 18: Beer Group Free Cash Flow
BEER GROUP Free Cash Flow Beer Group Free Cash Flow (mn TRL) 1H2014 1H2015 EBITDA 409.0 367.8 Change in Working Capital 86.0 (96.4) Income Taxes & Employee Benefits Paid (37.4) (36.5) CAPEX, net (182.5) (132.3) Other Financial Income /(Expense), net 21.7 62.5 Other investing activities (Acq., Disp.,
Slide 19: Balance Sheet Flexibility
Balance Sheet Flexibility Anadolu Efes Consolidated Beer Group Net Leverage Ratio 1.9 2.4 times 1.6 1.7 1H 2014 1H 2015 1H 2014 1H 2015 3% 2.0% 2.0% 2.0% USD Cash Breakdown USD by Currency EUR 9% EUR 15% 3% TL TL 18% 6% RUB RUB 4% 65% 71% KZT KZT Other OTHER 1H2014 1H2015 1H2014 1H2015 TOTAL FINANCI
Slide 20: Borrowing Mix
Borrowing Mix Anadolu Efes Consolidated Beer Group 0% 1% Currency Breakdown 2% 1% 6% 6% 17% 19% 7% 11% 87% 82% 83% 79% 1H2014 1H2015 1H2014 1H2015 USD EUR TL PKR OTHER USD EUR TRY 1H2014 1H2015 1H2014 1H2015 Interest Breakdown 30% 30% 34% 38% 62% 66% 70% 70% Fixed Floating Fixed Floating 20
Slide 21: Balanced Amortization Schedule
Balanced Amortization Schedule 694 500 500 Maturity Schedule Million USD 213 228 118 130 120 58 71 56 35 43 0 15 0 0 0 2015 2016 2017 2018 2019 2020 2021 2022 2023 Beer Group AEFES Consolidated * As of 1H2015 Average maturity of the debt for; Beer Group is app. 5.2 years Anadolu Efes is app. 4.0 yea
Slide 22: Anadolu Efes Consolidated Free Cash Flow
ANADOLU EFES CONSOLIDATED Free Cash Flow AEFES Free Cash Flow (mn TRL) 1H2014 1H2015 EBITDA 925.6 895.6 Change in Working Capital (63.6) (403.7) Income Taxes & Employee Benefits Paid (86.5) (94.0) CAPEX, net (453.4) (645.1) Other Financial Income /(Expense), net (60.2) 80.1 Other investing activitie
Slide 23: Financial Income / Expense Breakdown
Financial Income / Expense Breakdown Anadolu Efes Consolidated (mn TRL) 1H2014 1H2015 Interest income 42.2 42.8 Interest expense (100.8) (108.1) Foreign exchange gain 506.8 384.3 Foreign exchange loss (510.7) (808.7) Other financial expenses (net) (6.7) (13.6) Net Financial Income /(Expense) (69.3)
Slide 24: Financial Priorities
Financial Priorities Tight balance sheet management Commitment to strong FCF generation Continued focus on reduction in costs & expenses Reduce volatility in P&L due to FX movements Optimized capital expenditure Deleveraging through strong FCF generation Continued commitment to Investment Grade Rati
Slide 25: Closing Remarks
Closing Remarks by Damian Gammell
Slide 26: Summary
Summary Managed to deliver flat revenues in 1H2015 vs prior year, despite softer volumes Full year consolidated top line will deliver growth versus prior year Better than expected improvement in the margins of international beer segment in 1H2015 Positive FCF generation on beer operations despite th
Slide 27: FY2015 Guidance
FY2015 Guidance BEER OPERATIONS Reason for revision vs previous guidance Turkey Beer Market flat Softer than expected 1H2015 Russian Beer Market inline or higher decline vs 2014 Better than expected 1H2015 Efes Turkey Volume in line with the market reiterated Efes Russia Volume in line with t
Slide 28: Upcoming Events
Upcoming Events October : Goldman Sachs CEEMEA Corporate Days, Stockholm-Frankfurt Deutsche Bank Turkey & Emerging Europe Conference, Göcek J.P. Morgan Asia & CEEMEA Emerging Markets Corporate Conference, London November: Release of 9M2015 Financial Results & Webcast 28
Slide 29: Anadolu Efes Living Our Values
EFES ANADOLU EFES [LIVING TH - VALU ES! OWVO&2O PASSIONATE PROFESSIONAL ENTREPRENEURIAL COLLABORATIVE SUSTAINABLE & PROUD
Slide 30: Q&A
Q&A
Slide 31: Appendix
Appendix
Slide 32: FX Rates
FX Rates 1H2014 1H2015 Δ% 2014 AVG 2.16 2.56 18% 2.19 USD/TL PE 2.12 2.69 27% 2.32 AVG 2.97 2.86 -4% 2.90 EUR/TRL PE 2.89 2.98 3% 2.82 AVG 34.98 57.40 64% 38.42 USD/RUB PE 33.63 55.52 65% 56.26 AVG 176.43 185.25 5% 179.19 USD/KZT PE 183.51 186.20 1% 182.35 AVG 10.18 21.25 109% 11.87 USD/UAH PE 11.82