FY18 RESULTS 28 February 2019, Istanbul Forward-Looking Statements - - PowerPoint PPT Presentation

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FY18 RESULTS 28 February 2019, Istanbul Forward-Looking Statements - - PowerPoint PPT Presentation

FY18 RESULTS 28 February 2019, Istanbul Forward-Looking Statements This presentation includes forward-looking statements including, but not limited to, statements regarding Coca-Cola eceks (CCI) plans, objectives, expectations and


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FY18 RESULTS

28 February 2019, 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.

Forward-Looking Statements

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Operational Review

Burak Başarır, CEO

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2018 Highlights

4,1% 20,8% 26,2% 6,3% 26,6% 35,7%

Volume Revenue EBITDA 2017 2018

Accelerating quality growth

10,4% 16,4% 11,8% 17,6%

EBIT Margin EBITDA Margin 2017 2018

642 729 730

2016 2017 2018

Accelerating quality growth Continued margin expansion Another year of solid FCF

Delivering on our guidance with strong financial performance

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Highest net revenue & EBITDA growth

  • f the past 6 years

Revenue Growth Management & effective hedging Focus on working capital and capex efficiency GROWTH YOY MARGIN % TL MILLION

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1,4% 3,3% 4,8% 2016 2017 2018

Strong volume delivery in all major countries

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77 mn UC incremental

volume in 2018

3,2% 4,1% 6,3% 2016 2017 2018

TURKEY INTERNATIONAL CONSOLIDATED

29 mn UC incremental

volume in 2018

47 mn UC incremental

volume in 2018

5,2% 4,9% 7,8% 2016 2017 2018 UNIT CASE VOLUME GROWTH YOY

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FY18 Volume growth

SPARKLING STILLS WATER NRTD TEA

  • 2.2%

6.8%

  • 4.9%

11.6% 7.0% 6.0% 11.5%

  • 1.2%

% in Total Mix (2018)* 71% 7% 14% 9% 59 mn UC incremental Sparkling volume in 2018

TOTAL

0.6% 6.3% 4Q18 2018

UNIT CASE VOLUME GROWTH YOY

* Totals may not foot due to rounding differences

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Turkey: Quality growth maintained

4,8% 6,1% 6,9% 18,7% 34,4%

Volume Volume (excl. NRTD Tea) Transactions (excl. NRTD Tea) Net Revenue EBITDA*

  • 1,8%

1,7% 5,7% 2016 2017 2018

Accelerating Volume Growth Increasing IC Share

20% 22% 23% 2016 2017 2018

Higher Share of Sugar Free**

5,3% 5,7% 6,8% 2016 2017 2018

…driven by Strong Sparkling momentum Highest volume growth in 7 years…

Above 30% volume growth in ‘Coca-Cola No Sugar’

  • Successful innovations and consumer promotions
  • Higher portfolio availability in growing channels
  • Focus on affordability
  • Accelerated cooler investment

2018 GROWTH YOY

* EBITDA excluding other operating income/expense * *Share of No Sugar & Light in Sparkling

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YoY % in Sparkling % in Sparkling

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Middle East & Pakistan highlights

7,3% 3,9% Pakistan Iraq Focus on efficiencies & core Sparkling 10th Year of Pakistan Operation

Sales Volume

(mn UC)

93 335

2008 2018

3.6x

Sparkling Market Share*

*Source: Canadean

Double-digit volume growth in Coca-Cola trademark Above- industry growth in Sparkling

Production Capacity (mn UC)

3.6x

112 408

2008 2018

42%

+2 pp in 2018

2018 VOLUME GROWTH YOY

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Central Asia highlights

14,1% 29,7% Kazakhstan Azerbaijan Double-digit volume growth in key markets Accelerating growth and gaining share

Azerbaijan

2nd

  • 9,6%

7,0% 12,7% 2016 2017 2018

Accelerating CA Volume Growth Gaining Market Share in Kazakhstan

49% 49% 51% 2016 2017 2018

Highest-ever sales volume in Kazakhstan Fuse tea reached #1 position in Kazakhstan Above 30% volume growth in Sparkling in Azerbaijan

Source: Nielsen

fastest growing country in TCCC system in 2018

2018 VOLUME GROWTH YOY

YoY

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Financial Review

Andriy Avramenko, CFO

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(TL million) 4Q18 YoY Change 2018 YoY Change Net Sales 2.001 22,9% 10.623 26,6% Gross Profit 573 10,7% 3.527 27,2% EBIT (17) (140,1%) 1.255 43,6% EBITDA 147 (13,4%) 1.871 35,7% Net Income / (Loss) 148 n.m. 327 37,5% GP Margin 28,6% (320 bps) 33,2% 20 bps EBIT Margin (0,9%) (350 bps) 11,8% 140 bps EBITDA Margin 7,4% (300 bps) 17,6% 120 bps EPS* 0,58 n.m. 1,28 37,5%

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Summary financials

*EPS in TL per 100 shares

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Focus on quality growth and efficiency

Consolidated (TL), FX-Neutral

+6% +8% +20%

2,2 2,4

2017 2018

0,7 0,8

2017 2018 Strong topline growth in Turkey and Central Asia Higher NSR/UC in Turkey Effective cost management & hedging Increasing efficiency in Turkey and int’l

  • perations

Net Sales Revenue per UC Gross Profit per UC EBIT per UC

6,8 7,2

2017 2018

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Managing input costs and FX headwinds

World Sugar Prices (London#5 Average, USD/tonne) Resin Prices (Average, USD/tonne) LME Aluminium Prices (Average, USD/tonne) Hedged Position for 2019*

100%** 66% 58%

*As of February 2019 **For unregulated markets

  • Cash designation in place to manage FX

impact on input costs: Hard currency cash allocation for FX-denominated raw material purchases

  • Cash designated for c.90% of Turkey’s

2019 FX-denominated raw material purchases at USD/TRY 3.95

  • Positive impact on COGS and lower FX

gains due to designation of cash

Managing FX exposure related to raw materials...

100 200 300 400 500 2017 2018 500 1000 1500 2000 2017 2018 500 1000 1500 2017 2018

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Net income driven by strong EBITDA growth

238 327 492 (101) (195) (54) (6) 10 (56)

2017 ∆ in EBITDA ∆ in D&A* ∆ in FX gain/ (loss) ∆ in other financial inc./ (exp.) ∆ in other inc./ (exp.) ∆ in minority ∆ in tax 2018

*Depreciation and amortization

TL million

Net Income 2018 vs. 2017

Net Investment Hedging provided TL 288 million positive impact on net income in 2018

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Disciplined Financial Management

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Accelerating quality growth Net Debt (USD mn) Net Debt / EBITDA Net Interest Coverage

2,1 1,5 1,4 2016 2017 2018

6,6 9,7 9,0

2016 2017 2018 652 555 500 2016 2017 2018 Continued deleveraging FX-Neutral Net Debt/EBITDA: ~1.2x Covenant < 3.25x Covenant > 4x Lower Net Interest Coverage due to cross-currency swap

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USD 75% USD 33% Euro 23% Euro 21% 41%

Local Currency 2% Local Currency 5%

2017 2018

Continued focus on balance sheet FX exposure

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Accelerating quality growth Breakdown of Consolidated Debt

Participating cross-currency swap transaction for USD 150 mn Net investment hedging for USD 281 mn Repayment of USD 100 mn USPP (May 2018) Repayment of USD 500 mn Eurobond (October 2018)

Cross- currency swap & Net Investment Hedging

Maturity Profile

19% 12% 2% 2% 15% 51%

2019 2020 2021 2022 2023 2024

USD 80 mn USPP USD 120 mn USPP USD 500 mn Eurobond

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Another year of solid Free Cash Flow

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Accelerating quality growth NWC / Sales CapEx / Sales

Efficient Net Working Capital Management Faisalabad Plant in Pakistan (April 2018) Accelerated cooler investments 7,4% 5,7% 4,5% 2016 2017 2018 7,3% 5,9% 8,1% 2016 2017 2018

Free Cash Flow Yield*

7,6% 8,2% 9,4% 2016 2017 2018 Higher FCF yield

*Based on year-end Mcap

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2019 Guidance

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  • Sales Volume:
  • 3%-5% growth on a consolidated basis
  • Flat volume in Turkey
  • 6%-8% growth in international operations
  • Net revenue growth:
  • 16%-18% on a consolidated basis (FX-neutral1)
  • EBITDA Margin:
  • Slight improvement on a consolidated basis
  • Capex/Sales: 7%-8% (on a comparable basis)
  • Net debt/ EBITDA: Lower than 1.5x (on an FX-neutral1 and organic basis)

1 FX-Neutral: Using constant FX rates when converting country financial statements to TL.

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Key takeaways

✓Continued Sparkling and IC growth in Turkey ✓Sustained growth in Pakistan with a focus on efficiency ✓Double-digit volume growth in Central Asia ✓Focus on reducing FX exposure

Delivered on our guidance with quality growth in 2018

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Q & A

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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

THANK YOU!