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3Q18 RESULTS
6 November 2018, Istanbul
3Q18 RESULTS 6 November 2018, Istanbul PUBLIC Forward-Looking - - PowerPoint PPT Presentation
3Q18 RESULTS 6 November 2018, Istanbul PUBLIC Forward-Looking Statements This presentation includes forward-looking statements including, but not limited to, statements regarding Coca-Cola eceks (CCI) plans, objectives, expectations
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6 November 2018, Istanbul
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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 be identified by the use of words such as “may,” “will,” “expect,” “intend,” “estimate,” “anticipate,” “plan,” “target,” “believe” or other words of similar meaning. These forward-looking statements reflect the current views and assumptions of management and are inherently subject to significant business, economic and other risks and uncertainties. Although management believes the expectations reflected in the forward-looking statements are reasonable, at this time, you should not place undue reliance on such forward-looking statements. Important factors that could cause actual results to differ materially from CCI’s expectations include, without limitation: changes in CCI’s relationship with The Coca-Cola Company and its exercise of its rights under our bottler's agreements; CCI’s ability to maintain and improve its competitive position in its markets; CCI’s ability to obtain raw materials and packaging materials at reasonable prices; changes in CCI’s relationship with its significant shareholders; the level of demand for its products in its markets; fluctuations in the value of the Turkish Lira or the level of inflation in Turkey; other changes in the political or economic environment in Turkey or CCI’s other markets; adverse weather conditions during the summer months; changes in the level of tourism in Turkey; CCI’s ability to successfully implement its strategy; and other factors. Should any of these risks and uncertainties materialize, or should any of management’s underlying assumptions prove to be incorrect, CCI’s actual results from operations or financial conditions could differ materially from those described herein as anticipated, believed, estimated or expected. Forward-looking statements speak only as of this date and CCI has no obligation to update those statements to reflect changes that may occur after that date.
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MARGIN
…fifth consecutive quarter of margin expansion
42,6% 27,3% 7,5%
9M18 3Q18
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54,2% 35,1% 2,9%
VOLUME NET REVENUE EBITDA VOLUME NET REVENUE EBITDA
Quality growth leading to…
GROWTH YOY
14,2% 18,8% 34,7% 16,4% 21,5% 35,0%
EBIT EBITDA GROSS PROFIT
3Q17 3Q18
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1,3% 3,7% 5,9% 9M16 9M17 9M18
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76 mn UC incremental
volume in 9M18
2,8% 4,7% 7,5% 9M16 9M17 9M18
TURKEY INTERNATIONAL CONSOLIDATED
30 mn UC incremental
volume in 9M18
46 mn UC incremental
volume in 9M18
4,4% 5,7% 9,1% 9M16 9M17 9M18 UNIT CASE VOLUME GROWTH YOY
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SPARKLING STILLS WATER NRTD TEA
3Q18 Growth YoY 9M18 Growth YoY % in Total Mix
4.3% 8.7% 8.6% 15.7% 1.4% 5.8%
72% 7% 13% 8%
63 mn UC incremental Sparkling volume in 9M18
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margin** expansion
8% growth in Sparkling in 9M18
*June-July-August **EBITDA margin excluding other operating income/expense
32+% Growth in Low/No Calorie in 9M18
Successful portfolio strategy to support profitability…
9% 15% 15%
1Q18 2Q18 3Q18
NSR/UC Growth y-o-y
22% 22% 23%
1Q18 2Q18 3Q18
IC Share in Sparkling
GROWTH YOY
3Q18 9M18
Volume (UC) (0.5%) 5.9% Volume (UC)
(excl.NRTD Tea)
1.5% 8.3% Net Sales Revenue 14.7% 20.3% EBITDA 117.3% 67.5%
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Launch of ‘Sprite Lemon Mint’
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YTD Market share gains across the region
Pakistan
Iraq
elections in July
growth in brand ‘Coca-Cola’
UNIT CASE VOLUME GROWTH YOY
5%
8% 6%
Pakistan Iraq
3Q18 9M18 3Q18 9M18
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Strong performance across the region
14% 25% 16% 30%
Kazakhstan Azerbaijan
3Q18 9M18 3Q18 9M18
consumer promotions
Azerbaijan: Among top 5 fastest growing countries in TCCC system in 9M18
UNIT CASE VOLUME GROWTH YOY 40+% Ice Tea growth in KZ Launch of ‘Sprite Cucumber’ in KZ
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Net Sales 2,750 3,715 35.1% Gross Profit 954 1,299 36.2% EBIT 392 611 56.0% EBITDA 518 799 54.2% Net Income / (Loss) 241 37 (84.5%) GP Margin 34.7% 35.0% 30 EBIT Margin 14.2% 16.4% 220 EBITDA Margin 18.8% 21.5% 270 EPS* 0.95 0.15 (84.5%)
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*EPS in TL per 100 shares
EBITDA Net Revenue Volume growth 3Q17 3Q18 YoY Change
TL Million
bps bps bps
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1,0 1,2 3Q17 3Q18 2,4 2,6 3Q17 3Q18 6,8 7,3 3Q17 3Q18
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Consolidated (TL), FX-Neutral
Net Sales Revenue per UC Gross Profit per UC EBIT per UC
+8% +11% +26%
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World Sugar Prices (London#5 Average, USD/tonne) Resin Prices (Average, USD/tonne) LME Aluminium Prices (Average, USD/tonne) Hedged Position for 2018*
100%** 92% 97%
*As of October 2018 **For unregulated markets
impact on input costs: Hard currency cash allocation for FX-denominated raw material purchases
raw material purchases is hedged at USD/TRY 3.55
raw material purchases is hedged at USD/TRY 3.95
gains due to designation of cash
Hedging FX exposure related to raw material...
100 200 300 400 500 9M17 9M18 500 1000 1500 2000 9M17 9M18 500 1000 1500 9M17 9M18
Hedged Position for 2019*
85%** ~50%
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241 37 281 (45) (315) (44) (12) (10) (59)
3Q17 ∆ in EBITDA ∆ in D&A* ∆ in FX gain/ (loss) ∆ in other financial inc./ (exp.) ∆ in other inc./ (exp.) ∆ in minority ∆ in tax 3Q18
*Depreciation and amortization
TL million
Net Income 3Q18 vs. 3Q17
Net Investment Hedging provided TL 314 million positive impact on net income in 3Q18
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USD 75% EUR 23% Local Currency 2% USD 61% Hedged Portion 14% Local Currency 2% EUR 23%
DEC’17 JAN’18
USD 30% 29% 15% 4% EUR 22%
Local Currency
JUN’18 SEP’18 Hedging transaction for USD 150 million in Jan’18 Net Investment Hedging for USD 281 mn in Apr’18
Hedging through cross-currency swap Net Investment Hedging
USD 29% 30% 16%
Local Currency 3%
EUR 22%
Monitoring further opportunities…
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Net Debt / EBITDA* Net Debt (USD mn) Net Interest Coverage*
*Annualized
NWC / SALES* CapEx / SALES* FCF (TL mn)
1,48 1,52 1,60 9M17 2017 9M18 544 555 504 9M17 2017 9M18 8,2 9,7 8,9 9M17 2017 9M18 6,0% 5,9% 9M17 9M18 4,6% 5,9% 9M17 9M18 672 888 9M17 9M18
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CCI Investor Relations Tel: +90 216 528 4000 | Fax: +90 216 5107010 | CCI-IR@cci.com.tr | www.cci.com.tr