Analyst Meeting 18 September 2019, Istanbul
Forward-Looking Statements 2 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 Forward-looking statements can generally be identified by the use of words such as “may,” “will,” facts. “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. 2 2
• INTRODUCTION, LOOKING BACK & FORWARD • INSIGHTS ON MAJOR CCI MARKETS • DRIVING SHAREHOLDER VALUE 3
A REGIONAL POWERHOUSE WITH SUPERIOR GROWTH PROFILE 1.5 bn UC annual production capacity in 26 production Total NARTD plants industry in 2nd largest CCI countries: Coke bottler by population 6th largest served Coke bottler $13BN* by volume $2.3 bn revenue $395 mn EBITDA 10 countries 400 mn Over population 1 million coolers in 920k outlets 4 *Source: Canadean and internal estimates, data as of 2018
COMMITTED TO QUALITY GROWTH Organic Volume Growth Revenue Growth (FX-Neutral) Expanding EBITDA Margin 18,1% 6% 13% 16,9% 10% 4% 3% 15,5% 5% 2016 2017 2018 2016 2017 2018 2016 2017* 2018* More diversified portfolio Regional Pricing Effective Cost Management Optimum price/pack architecture Channel prioritization Disciplined OpEx Management Trade Promotion Management Improving Efficiency Innovation & Premiumization 5 *Reflects the impact of TFRS 15 and TFRS 16 standards
OPERATING IN MARKETS WITH EXCEPTIONAL OPPORTUNITIES CCI Value Share (2018) Total market sizes and expected growth in CCI markets Ice Tea 1 1 34% Energy 1 1 4% 10% Water 3 3 8% Juice 3 2 53% Sparkling 6 3 Total NARTD 13 9 29% Market Size (USD bn) (2018) Industry Growth (USD bn) (2019-2023) 6 *Source: Canadean and internal estimates, Incremental NARTD value opportunity in CCI markets is USD 9 bn in 2019-2023 (10% CAGR) data as of 2018
TURKEY: DELIVERING QUALITY GROWTH Significant headwinds… …managed succesfully Smart Full Portfolio • 10% Special Consumption Tax (Jan’18) Pricing Power • Higher commodity prices Segmented Effective • Depreciation of Turkish Lira Execution & Trade Promotion Channel • Declining consumer confidence Prioritization Management Quality growth algorithm maintained… …with Sparkling growth …and increasing IC share 55% 5,7% 24% 4,7% 23% 32% 22% 22% 1,7% 19% 19% 12% 4,8% 3,3% -0,5% 2017 2018 1H19 2017 2018 1H19 2017 2018 1H19 7 Volume Revenue EBITDA (Excluding other) Reflects the impact of TFRS 15 and TFRS 16 standards
TURKEY: LEVERAGING OUR PORTFOLIO TO CAPTURE VALUE Optimum price/pack architecture for margin accretion: OBPPC Excellence in execution Trade Promotion Management • ROI based decision TRY 100 mn* • Channel dynamics the in the savings in with the cost-to- right appropriate optimal serve • Regional approach O ccasion B rands P acks Be Available 40K Door net cooler Be Cold in the target at the right placement in 2019 C hannel P rice P Be Visible C 8 *2017+2018+YTD2019
TURKEY: INCREASING FOCUS ON DISCOUNTER AND ON-PREMISE CHANNELS Modern Discounter Traditional On-premise 22% 12% 48% 44% 17% 27% 36% 27% 14% 23% 7% 5% 2010 2015 1H19 2010 2015 1H19 2010 2015 1H19 2010 2015 1H19 Channel’s share in total CCI volume Driving profitable growth Volume growth through portfolio Investing in value share & Full glass portfolio availability presence and availability with full portfolio play profitability New Listings in 2019 Competitive Cooler Strategy Increasing basket penetration Highest Number of SKU Listings Activation of special occasions through occasions Increasing returnable bottle & Increasing Value Share in both Premiumization in modern 9 No Sugar availability Investing in digital platforms Sparkling & NARTD on-premise
PAKISTAN: CHALLENGING OPERATING ENVIRONMENT Macroeconomic Backdrop Regulatory Environment • Federal Excise Tax rate up by 1.5 pps to 13% (Jul’19) GDP Growth Exchange Rate (USD/PKR) • Water tax (PKR 1/Liter on production) partially implemented 5,4% 156 5,2% 139 110 2,9% Leveraging market execution to unlock potential growth… 2017 2018 2019E 2017 2018 Sep'19 Private Consumption Unemployment Rate • Expanding outlet coverage: +13.6K (1H19) Growth 8,7% 7,5% • Increasing cold drink equipment: +18K (1H19) 6,3% 5,7% 5,3% 4,5% • Higher penetration of top SKUs at 71% (+18pp yoy) • Improving route-to-market 2017 2018 2019E 2017 2018 2019E • Continued optimization of discounts & promotions Slowdown in total NARTD market in 2019 10 Source: IMF World Economic Outlook Database, April 2019 for GDP growth, Bloomberg for exchange rate, Economist Intelligence Unit Country Report for unemployment rate, IHS Market data for private consumption growth
PAKISTAN: FUNDAMENTALS REMAIN INTACT WITH SIGNIFICANT GROWTH OPPORTUNITIES NARTD Market in Pakistan* CCI Value Share Opportunity* Energy Energy Water Sparkling 6% Juice 1% 7% Juice Water 7% $3.5 bn 25% Sparkling 43% 62% Great opportunity in flavoured sparkling NARTD 28% Cola Flavoured Sparkling CCI Value Share Market Opportunity CCI Nearest CCI Nearest Competitor Competitor Leveraging high Launching new Building competitive brand love score of products for portfolio in flavored incremental volume Coca-Cola sparkling 11 *Source:Canadean and internal estimates, data as of 2018
IRAQ: DELIVERING PERFORMANCE WITH BETTER SECURITY CONDITIONS NARTD Market in Iraq* CCI Value Share Opportunity* Energy Energy Sparkling Water 2% 14% Juice 40% Water 8% $2.3 bn Sparkling 38% NARTD 16% 43% Juice CCI Value Share Market Opportunity Spearheading Maintaining Re-engineering base growth water with Coca-Cola of Crystal business 12 *Source:Canadean and internal estimates, data as of 2018
KAZAKHSTAN: INCREASING VALUE SHARE WITH IMPROVING EXECUTION SCORES NARTD Market in Kazakhstan* CCI Value Share Opportunity* Energy Energy 2% Sparkling 13% Ice Tea Water 11% 9% Juice 18% 45% $1.3 bn Ice Tea 48% 14% Juice Sparkling 62% 18% NARTD 37% Water CCI Value Share Market Opportunity Increasing userbase and Expanding Stills Capturing regional portfolio frequency differences 13 *Source:Canadean and internal estimates, data as of 2018
SUMMARY FINANCIALS Consolidated (million TL) Change 1H19 2018 Change Change 2Q19 10,623 6,117 3,888 Net Sales 26.6% 23.6% 24.7% 3,527 2,078 1,380 Gross Profit 27.2% 22.4% 23.6% EBIT 1,269 43.8% 751 12.7% 610 18.3% EBITDA 1,919 35.5% 1,141 20.6% 820 25.5% 546 473 449 Profit/(Loss) Before Tax 31.4% 88.7% 57.6% 321 409 411 Net Income/(Loss) 36.1% 200.5% 122.1% GP Margin 33.2% 0.2pp 34.0% (0.3pp) 35.5% (0.3pp) EBIT Margin 11.9% 1.4pp 12.3% (1.2pp) 15.7% (0.9pp) EBITDA Margin 18.1% 1.2pp 18.7% (0.5pp) 21.1% 0.1pp EPS* 1.26 36.1% 1.61 200.5% 1.62 122.1% Numbers include TFRS 15 and IFRS 16 adjustments 14 *EPS in TL per 100 shares
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