Yatrm Bodrum Conference June 7, 2013 Business Overview & - - PowerPoint PPT Presentation

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İş Yatırım Bodrum Conference

June 7, 2013

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Business Overview & Strategy 1Q13 Operational Review 1Q13 Financial Review Going Forward Appendix

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Shareholder Structure

(1) Anadolu Efes and its fully-owned subsidiaries (2) TCCC and its fully-owned subsidiaries (3) Listed on Borsa Istanbul

Operating in one of the world’s most dynamic and exciting markets 2004-2012 CAGR:

• Sales volume: 15%
• Net Sales: 19%
• EBITDA: 22%

A gateway to Turkey, Pakistan, Central Asia and Middle East Serving more than 360 million of people; 60% of our population is below 30 years of age 2012 volume growth of 12%

We are…

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Per Cap Consumption in Liters (2012)

Median Age

CCI territory total population: over 360 million

Source: CCI and United Nations

…capitalizing on favorable demand and demographic drivers…

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• N. Iraq - 2006

Syria - 2007 Pakistan - 2008

1 10 # of Countries 71 360 Population Served (mn) 5 22 Operating Plants

275 mn UC 318 mn UC 850 mn UC

…allowing us to expand succesfully…

2004 2012 2004 2012 2004 2012 S.Iraq - 2012

2004 2005 2012

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Int'l 33% Turkey 67% Int'l 33% Turkey 67%

Volume split (uc) - Geography

2012 2005

Volume split (uc) - Category

Int'l 15% Turkey 85% Int'l 37% Turkey 63%

EBITDA Split

2012 2005

Sparkling 70% Still 22% Tea 8%

Revenue Split

2012 2005 2012 2005

…diversifying across geographies and categories.

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7

Management of diversity Local relevance Empowerment Local accountability Leverage technology for customer service

Our operating model entails…

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…so that we inspire consumers, customers and people…

Consumers Customers People I

nnovation

F

ulfillment

R

elationship

S

erve

T

rust

2012

2020

ALIGNMENT EMPOWERMENT HIGH-PERFORMANCE

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Turkey * Pakistan Kazakhstan Azerbaijan 67% #1 29% #2 42% #1 59% #1 25% #1 2% #8 19% #1 13% #2 7% #3 10% #3 8% #3 50% #1

Source: Nielsen * Market share numbers are restated due to a change in forecasting universe

…and enjoy strong positions in key markets.

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Business Overview & Strategy 1Q13 Operational Review 1Q13 Financial Review Going Forward Appendix

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1Q13 Review

Double digit volume and revenue growth Net revenue per case up 4% Favorable cost environment Improved operating margins

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1Q12 1Q13 1Q12 1Q13 1Q12 1Q13 (Unit cases in millions) (Unit cases in millions) (Unit cases in millions) 108.0 116.1 165.0 197.7 57.0 81.7

Turkey Volume International Volume Consolidated Volume

Volume up by 20% in 1Q13

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1Q13 1Q13

1Q13 Sales Volume Breakdown

Sparkling 67% Still 22% Tea 11% Int. 41% Turkey 59%

Volume split (uc) - Category Volume split (uc) - Geography

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Strong sparkling category growth Coke Zero re-launch New launches addressing IC consumption

Turkey

Coca-Cola, Coca-Cola Light, Coca-Cola Zero, Fanta, Sprite, Can 250 ml Cappy Pulpy Lemonade, 1lt Coca-Cola Zero 1.75lt Sprite 1.5lt

Product introductions Promotions

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International Operations

Jordan Coca-Cola Can 355 ml Central Asia Bonaqua Pet 500ml,1 L,1.5L Kazakhstan +%37% Pakistan +17%

Product introductions Promotions

Strong local marketing campaigns Increased market penetration Coke studio now in Iraq and Jordan

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International Operations

International Volume Split

Kazakhstan 20% Kyrgyzstan 3% Azerbaijan 6% Turkmenistan 5% Jordan 3% Iraq 22% Syria 0% Tajikistan 0% Pakistan 40%

1Q13

Kazakhstan +%37% Iraq +215% Pakistan +17% Azerbaijan +27%

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Business Overview & Strategy 1Q13 Operational Review 1Q13 Financial Review Going Forward Appendix

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1Q12 1Q13 (TL in millions) (US$ in millions) (TL in millions)

Turkey Net Sales International Net Sales Consolidated Net Sales

1Q12 1Q13 1Q12 1Q13 146.6 205.0 476.6 736.6 917.3 553.2

Net sales up by 25% in 1Q13

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(TL in millions) (US$ in millions) (TL in millions)

Turkey EBITDA

* 13.6% 12.5% 13.2% 4.1% * 13.9% 11.1% * *EBITDA Margin

Turkey EBITDA International EBITDA Consolidated EBITDA

1Q12 1Q13 1Q12 1Q13 1Q12 1Q13 59.7 75.4 5.9 27.1 81.8 127.1

EBITDA (Excl. other) up by 55.4% in 1Q13 - Proforma

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*mn TL

Financial Expenses - Proforma

Interest income Interest expense (-) Foreign exchange gain / (loss) Unrealized FX gain / (loss) - Borrowings Gain / (loss) on derivative transactions Financial Income / (Expense) Net

9.1 7.9 (19.5) (16.0) 1.0 (23.1) (12.1) 60.7 (0) (0) (21.7) 29.5

1Q13 1Q12

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Debt Structure - Proforma

*In original currency

USD denominated* EURO denominated* TL denominated Other (in USD terms) Total Financial Debt in TL Total Cash & Equivalent in TL Net Debt in US$

871 852 46 51 34 35 87 84 1,875 1,822 512 608 754 681

Net Debt in TL

1,363 1,215 2%

• 7%
• 4%

4% 3% (16%) 11% 12%

Maturity Date % of total long term debt

2013 2014 2015 2016 5% 90% 4% 0%

1Q13 FY12 Change%

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Business Overview & Strategy 1Q13 Operational Review 1Q13 Financial Review Going Forward Appendix

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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 Growth

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2013 Guidance

Consolidated volume is to grow

• Turkey volume up at mid to high

single digit growth

• Int’l volume up at mid to high

teens (organic basis) Net revenue growth > volume growth EBITDA growth ≥ Net revenue growth

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Appendix Financial Statements 2012 Financial Leverage 2012 Corporate Structure Country Data Building a Sustainable Growth Business Turkey AFB Market Tea Market Segments in Turkey Trade Structure in Turkey

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TL/$ Year-End TL/$ Average December 31, 2012 1.7826 December 31, 2012 1.7922 December 31, 2011 1.8889 December 31, 2011 1.6708

∆

• 5.6%

∆

7.3%

Consolidated / Turkey International Functional Currency TL USD Reporting Currency TL USD Inflation Annual ∆ December 31, 2012 6.16%

Basis of Preparation

• Accounting standard is IFRS as per regulations of the Capital Markets

Board of Turkey (CMB).

• The Group’s interest in joint ventures is accounted by way of

proportionate consolidation.

• The functional currency of CCBPL is Pakistan Rupee (PKR).

Definitions

• Net Sales – Net of discounts and special consumption tax for Turkish
• peration
• EBITDA = EBIT + Amortization & Depreciation + Relevant Non Cash

Expenses including Provision for Employee Benefits - Relevant Non-cash income including Negative Goodwill

Presentation

Introduction to Financial Statements

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(TL mn) 2012 2011 Change %

Volume (m/uc)

850.5 761.7 11.7%

Net Sales

4,132.4 3,408.6 21.2%

COGS

(2,543.9) (2,145.8) 18.6%

Gross Profit

1,588.5 1,262.8 25.8%

OPEX

(1,113.1) (939.9) 18.4%

Other Inc/Exp (Net)

(1.2) 5.4 (121.8%)

EBIT

474.2 328.3 44.4%

EBIT (exc. other)

475.4 322.9 47.2%

Income Before Minority Int. & Tax

482.5 183.4 163.2%

Minority Interest

(4.8) (1.2) 302.9%

Income Tax

(97.6) (41.9) 133.0%

Net Income/(Loss)

380.1 140.3 171.0%

EBITDA

685.5 486.9 40.8%

EBITDA (exc. other)

682.6 484.8 40.8%

Gross Margin

38.4% 37.0%

EBIT Margin

11.5% 9.6%

EBIT Margin (exc. other)

11.5% 9.5%

EBITDA Margin

16.6% 14.3%

EBITDA Margin (exc. other)

16.5% 14.2%

Income Statement - Consolidated

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(TL mn) 2012 2011 Change %

Volume (m/uc)

568.5 546.8 4.0%

Net Sales

2,757.6 2,472.8 11.5%

COGS

(1,604.6) (1,476.1) 8.7%

Gross Profit

1,152.9 996.7 15.7%

OPEX

(852.5) (752.2) 13.3%

Other Inc/Exp (Net)

10.8 23.5 (54.3%)

EBIT

311.2 267.9 16.2%

EBIT (exc. other)

300.4 244.4 22.9%

Income Before Minority Int. & Tax

350.2 141.6 147.3%

Minority Interest

• Income Tax

(65.1) (21.8) (198.2%)

Net Income/(Loss)

285.1 119.8 138.0%

EBITDA

434.7 362.6 19.9%

EBITDA (exc. other)

423.4 340.8 24.3%

Gross Margin

41.8% 40.3%

EBIT Margin

11.3% 10.8%

EBIT Margin (exc. other)

10.9% 9.9%

EBITDA Margin

15.8% 14.7%

EBITDA Margin (exc. other)

15.4% 13.8%

Income Statement - Turkey

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(USD mn) 2012 2011 Change % Volume (m/uc)

282.0 215.0 31.2%

Net Sales

770.6 576.2 33.7%

COGS

(528.0) (417.1) 26.6%

Gross Profit

242.7 159.2 52.4%

OPEX

(150.4) (115.4) 30.3%

Other Inc/Exp (Net)

1.8 1.6 8.7%

EBIT

94.0 45.4 107.1%

EBIT (exc. other)

92.2 43.8 110.7%

Income Before Minority Int. & Tax

77.0 33.5 130.0%

Minority Interest

(3.3) (0.7 ) n.m

Income Tax

(17.5) (10.6) 65.8%

Net Income/(Loss)

56.1 22.2 152.9%

EBITDA

143.4 83.9 70.8%

EBITDA (exc. other)

139.7 83.4 67.4%

Gross Margin

31.5% 27.6%

EBIT Margin

12.2% 7.9%

EBIT Margin (exc. other)

12.0% 7.6%

EBITDA Margin

18.6% 14.6%

EBITDA Margin (exc. other)

18.1% 14.5%

Income Statement - International

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(TL million) December 31, 2012 December 31, 2011 (TL million) December 31, 2012 December 31, 2011 (audited) (audited) (audited) (audited) Cash & Cash Equivalents

489.9 522.2

ST Borrowings

229.3 125.4

Investments in Securities

118.0 3.8

Trade Payables

184.4 185.9

Trade Receivables and Due from Related Parties

297.5 284.2

Due to Related Parties

103.0 89.4

Inventories

319.0 268.2

Other Payables

130.8 92.5

Other Receivables

13.4 13.2

Provision for Corporate Tax

2.4 1.4

Other Current Assets

311.3 328.2

Provision for Employee Benefits

21.9 14.7

Total Current Assets

1,558.8 1,419.9

Other Liabilities

20.7 16.9

Property, Plant and Equipment

1,927.5 1,707.2

Total Current Liabilities

692.6 526.1

Intangible Assets (including goodwill)

721.3 593.7

LT Borrowings

1,447.6 1,508.6

Deferred Tax Assets

0.6 1.9

Provision for Employee Benefits

32.8 30.2

Other receivables and non-current assets

58.2 65.0

Other Liabilities

120.8 0.0

Total Non-current Assets

2,707.7 2,367.7

Deferred Tax Liability

58.5 52.6

TOTAL ASSETS

4,266.4 3,787.6

Total Non-Current Liabilities

1,659.7 1,591.4

Minority Interest

24.7 20.1

Shareholders Equity

1,889.4 1,650.0

TOTAL LIABILITIES and SHAREHOLDER’S EQUITY

4,266.4 3,787.6

Balance Sheet – FY12/FY11

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(TL mn) 2012 2011 Cash Flow From Operating Activities Net Income Adj for Non-Cash Items

696.8 533.5

Interest Paid

(53.9) (51.8)

Interest Received

31.5 31.4

Taxes Paid

(102.1) (30.0)

Employee Termination Benefits, Vacation Pay, Mngmt Bonus

(40.2) (33.8)

Operating Cash Flow

532.1 449.2 18.4%

Change in Working Capital

(11.9) (162.2)

Operating Cash Flow post Change in WC

520.3 287.0 81.3%

Cash Flow Investing Activities Property, Plant and Equipment

(366.5) (499.1)

Acquisitions

210.4

Free Cash Flow

(56.6) (212.1) (73.3%)

Free Cash Flow

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FY11 FY12

(mn TL)

Net Debt/EBITDA Capex/Net Sales FCF

Financial Leverage and FCF

14.6%

FY11 FY12 FY11 FY12 (212) 2.3x 14.6% 14.0% 154 1.6x

(Excluding – acquisitions) (Excluding – acquisitions) (TL million)

ROIC

FY11 FY12

(mn TL)

9.6% 11.3%

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Corporate Structure

Coca-Cola İçecek A.Ş.

CCI International Holland B.V. The Netherlands Turkmenistan Coca-Cola Bottlers , Turkmenistan J.V. Coca-Cola Almaty Bottlers L.L.P., Kazakhstan Azerbaijan Coca-Cola Bottlers L.L.C, Azerbaijan Coca-Cola Bishkek Bottlers CJSC, Kyrgyzstan The Coca-Cola Bottling Company of Jordan Ltd., Jordan

51.23% 70.49% 90.00% 29.51% 50.00% 99.96% 99.99% 99.60% 100.00%

Coca-Cola Beverages Pakistan Ltd., Pakistan Coca-Cola Satış ve Dağıtım A.Ş., Turkey Mahmudiye Kaynak Suyu

• Ltd. Şti., Turkey

Efes Sınai Dış Ticaret A.Ş, Turkey

59.50% 48.77% 16.31%

Distribution L.L.C., Syria Syrian Soft Drink Sales and Waha Beverages B.V,

83.57% 49.39% 100.00%

CC for Beverage Industry Ltd., Iraq The Netherlands Coca-Cola Beverages Tajikistan L.L.C., Tajikistan Al Waha for Soft Drinks, Juices, Mineral Water, Plastics and Plastic Caps Production L.L.C., Iraq Tonus Turkish-Kazakh Joint Venture L.L.P, Kazakhstan

100.00%* 99.87%* 100.00%* 99.23% 100.00% 76.40% 85.00%

* Direct and indirect

64.94%*

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Population (mn) in 2012

(2)

% of population below 30 years (3) GDP per capita in 2012 ($) (2) Per capita consumption of sparkling bev. (L) in 2012 (4) CCI’s market share in sparkling bev. in 2012 (5) CCI’s 2012 Volume Breakdown Turkey 75.6(1) 51% 15,029 45 67% 66.8% Pakistan 181.1 64% 2,876 15 29% 9.8% Kazakhstan 16.6 51% 13,921 34 42% 8.2% Azerbaijan 9.5 49% 10,685 25 59% 4.5% Iraq 33.9 70% 4,620 43

• 5.2%

Jordan 6.5 66% 6,044 46

• 1.6%

Turkmenistan 5.2 58% 8,469 43

• 2.3%

Kyrgyzstan 5.5 60% 2,411 24

• 1.4%

Syria 21.3 64% 4,814 (6) 12

• 0.1%

Tajikistan 7.1 68% 2,211 11

• 0%

Sources: TUIK (1), IMF (2), UN estimates (3), CCI & TCCC Estimates (4), Nielsen (5), CCI Estimate (6)

Country Data

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Water usage ratio (lt water/lt product) Energy usage ratio (MJ lt of product)

CCI Ankara Plant Quality Achievement Reward at 2011 TCCC EAG National Quality Awards CCI Turkey Best Country Bottling Operation at 2009 TCCC EAG President’s Environment Awards

Coca-Cola System Average Coca-Cola System Average

Building a Sustainable Growth Business

0.27 1.69 0.4 0.28 0.25 0.48 0.34 0.38 Turkey Jordan Kazakhstan Azerbaijan 2005 2012 1.74 3.44 2.10 2.10 1.40 1.96 1.76 1.82 Turkey Jordan Kazakhstan Azerbaijan 2006 2012

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Hot tea category constitutes 44% of alcohol-free beverages RTD- Ready-to-Drink Beverages AFB- Alcohol Free Beverages

Source: Canadean, 2012

AFB Market (exc. milk) 5.5 billion uc RTD AFB Market (exc. milk) 1.5 billion uc

Turkey AFB Market

Tea 44.4% RTD AFB 28.2% HOD 23.4% Hot Coffee 2.4% Powder&Concentrate 1.6% Sparkling Beverages 38.7% Bottled Water 31.5% Fruit Juices&Still Drinks 10.2% Ayran 9.9% Sparkling Water 6.7% Other 2.9%

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Very high levels of hot tea consumption

• Has the highest share of throat after tap water
• 95% of Turkish people drink tea everyday
• World’s highest per capita consumption

Source: Nielsen, 2012 Source: Nielsen, 2012 * Nielsen datas are excluding on-premise consumption channels

Volume 3.2 bn uc Value * 0.9 bn $

Tea Market Segments in Turkey

Loose 86.3% Teapotbag 8.4% Teabag 5.3% Loose 93.8% Teapotbag 4.8% Teabag 1.4%

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Half of volume delivered by traditional trade channels Highest retail coverage among all FMCG categories in Turkey

*Other includes game houses, entertainment, gymnasium, travel, accomodation, transportation, education, workplace and military. Source: Company

Retail Volume by Channel (2012)

Trade Structure in Turkey

Traditional Grocery 47% Supermarket 23% On Premise 21% Discount Store 5% Hypermarket 2% Other 0% Gas Station 2%

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Borsa Istanbul: CCOLA.IS Bloomberg: CCOLA TI Reuters: CCOLA.IS

Coca-Cola Icecek Investor Relations Tel: +90 216 528 4000 Fax: +90 216 365 8457 CCI-IR@cci.com.tr www.cci.com.tr

• Deniz Can Yücel

Investor Relations Manager Tel: +90 216 528 3386 deniz.yucel@cci.com.tr

Credit Rating Foreign Currency Senior Unsecured rating and IDR ‘BBB’, Stable Outlook Local Currency Senior Unsecured and IDR, ‘BBB’, Stable Outlook

(Fitch Rating, Feb. 5, 2013)

Corporate Governance Rating of 8.88 (out of 10)

(Saha Rating, July 2, 2012)

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