FY18 RESULTS 28 February 2019, Istanbul
Forward-Looking Statements 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. 2
Operational Review Burak Başarır, CEO
2018 Highlights Delivering on our guidance with strong financial performance Accelerating quality growth Accelerating quality growth Continued margin expansion Another year of solid FCF GROWTH YOY MARGIN % TL MILLION 35,7% 730 729 26,6% 17,6% 26,2% 642 16,4% 20,8% 11,8% 10,4% 6,3% 4,1% Volume Revenue EBITDA EBIT Margin EBITDA Margin 2016 2017 2018 2017 2018 2017 2018 Highest Revenue Growth Management Focus on working capital and net revenue & EBITDA growth & effective hedging capex efficiency of the past 6 years 4
Strong volume delivery in all major countries TURKEY INTERNATIONAL CONSOLIDATED 29 mn UC incremental 47 mn UC incremental 77 mn UC incremental volume in 2018 volume in 2018 volume in 2018 UNIT CASE VOLUME GROWTH YOY 7,8% 4,8% 6,3% 5,2% 3,3% 4,9% 4,1% 3,2% 1,4% 2016 2017 2018 2016 2017 2018 2016 2017 2018 5
FY18 Volume growth UNIT CASE SPARKLING STILLS WATER TOTAL NRTD TEA VOLUME GROWTH YOY 4Q18 -2.2% -4.9% 7.0% 11.5% 0.6% 6.8% 11.6% 6.0% -1.2% 6.3% 2018 % in Total 14% 7% 9% 71% Mix (2018)* 59 mn UC incremental Sparkling volume in 2018 6 * Totals may not foot due to rounding differences
Turkey: Quality growth maintained Highest volume growth in 7 years… …driven by Strong Sparkling momentum • Successful innovations and consumer promotions Increasing • Higher portfolio availability in growing channels Accelerating 34,4% IC Share Volume Growth • Focus on affordability YoY 5,7% • Accelerated cooler investment 23% 22% 20% 1,7% -1,8% 2016 2017 2018 2016 2017 2018 % in Sparkling 2018 GROWTH YOY 18,7% Higher Share of Above 30% Sugar Free** volume growth 6,8% in ‘Coca -Cola 5,7% 5,3% No Sugar’ 6,9% 6,1% 4,8% 2016 2017 2018 % in Sparkling Volume Volume (excl. Transactions Net Revenue EBITDA* NRTD Tea) (excl. NRTD Tea) * EBITDA excluding other operating income/expense 7 * *Share of No Sugar & Light in Sparkling
Middle East & Pakistan highlights 10 th Year of Pakistan Operation Focus on efficiencies & core Sparkling 2018 VOLUME GROWTH YOY Production Sales Volume Capacity (mn UC) (mn UC) 335 7,3% 3.6x 408 3.6x 93 112 Above- 2008 2018 2008 2018 industry growth in Sparkling 3,9% Sparkling Market Double-digit Share* volume growth in 42 % Coca-Cola trademark +2 pp in 2018 Pakistan Iraq *Source: Canadean 8
Central Asia highlights Double-digit volume growth in key markets Accelerating growth and gaining share 2018 VOLUME GROWTH YOY Gaining Market Accelerating CA Share in Volume Growth Kazakhstan YoY 29,7% 12,7% 51% Above 30% 49% 49% 7,0% volume growth in Highest-ever -9,6% Sparkling in sales volume 2016 2017 2018 2016 2017 2018 Azerbaijan in Kazakhstan Source: Nielsen Fuse tea 14,1% Azerbaijan reached #1 position in 2 nd Kazakhstan fastest growing country in TCCC system in 2018 Kazakhstan Azerbaijan 9
Financial Review Andriy Avramenko, CFO
Summary financials (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% 11 *EPS in TL per 100 shares
Focus on quality growth and efficiency Consolidated (TL), FX-Neutral Gross Profit per UC EBIT per UC Net Sales Revenue per UC +8% +6% +20% 7,2 6,8 2,4 2,2 0,8 0,7 2017 2018 2017 2018 2017 2018 Increasing efficiency in Turkey and int’l Strong topline growth in Turkey and Higher NSR/UC in Turkey Central Asia Effective cost management & hedging operations 12
Managing input costs and FX headwinds Managing FX exposure related to raw materials... • Cash designation in place to manage FX impact on input costs: Hard currency cash allocation for FX-denominated raw 66% 58% 100%** material purchases Hedged Position • Cash designated for c .90% of Turkey’s for 2019* 2019 FX-denominated raw material purchases at USD/TRY 3.95 World Sugar Prices LME Aluminium Prices Resin Prices (London#5 Average, USD/tonne) (Average, USD/tonne) (Average, USD/tonne) • Positive impact on COGS and lower FX gains due to designation of cash 500 1500 2000 400 1500 1000 300 1000 200 500 500 100 0 0 0 2017 2018 2017 2018 2017 2018 *As of February 2019 **For unregulated markets 13
Net income driven by strong EBITDA growth Net Income 2018 vs. 2017 TL million Net Investment Hedging provided TL 288 million positive impact on net income in 2018 (101) (195) 492 (54) 10 (6) (56) 327 238 ∆ in EBITDA ∆ in D&A* ∆ in FX gain/ ∆ in other ∆ in other inc./ ∆ in minority ∆ in tax 2017 2018 (loss) financial inc./ (exp.) (exp.) *Depreciation and amortization 14
Disciplined Financial Management Accelerating quality growth Net Debt / EBITDA Net Interest Coverage Net Debt (USD mn) 9,7 652 9,0 Covenant < 3.25x Covenant > 4x 6,6 2,1 555 1,5 1,4 500 2016 2017 2018 2016 2017 2018 2016 2017 2018 Lower Net Interest Coverage due to Continued deleveraging FX-Neutral Net Debt/EBITDA: ~1.2x cross-currency swap 15 15
Continued focus on balance sheet FX exposure Accelerating quality growth Maturity Profile Breakdown of Consolidated Debt Local Currency USD 500 mn Local Currency 2% Eurobond 5% Euro Cross- 23% currency swap 51% 41% & Net Investment Hedging Euro USD 120 mn USD 21% USD 80 mn USPP 75% USPP 19% USD 15% 33% 12% 2% 2% 2017 2018 2019 2020 2021 2022 2023 2024 Participating cross-currency swap transaction for USD 150 mn Repayment of USD 100 mn USPP (May 2018) Repayment of USD 500 mn Eurobond (October 2018) Net investment hedging for USD 281 mn 16 16
Another year of solid Free Cash Flow Accelerating quality growth NWC / Sales CapEx / Sales Free Cash Flow Yield* 9,4% 7,4% 8,2% 8,1% 7,6% 7,3% 5,7% 5,9% 4,5% 2016 2017 2018 2016 2017 2018 2016 2017 2018 Faisalabad Plant in Pakistan (April 2018) Higher Efficient Net Working Capital FCF yield Management Accelerated cooler investments 17 17 *Based on year-end Mcap
2019 Guidance • Sales Volume: o 3%-5% growth on a consolidated basis o Flat volume in Turkey o 6%-8% growth in international operations • Net revenue growth: o 16%-18% on a consolidated basis (FX-neutral 1 ) • EBITDA Margin: o Slight improvement on a consolidated basis • Capex/Sales: 7%-8% (on a comparable basis) Net debt/ EBITDA: Lower than 1.5x (on an FX-neutral 1 and organic basis) • 1 FX-Neutral: Using constant FX rates when converting country financial statements to TL. 18
Key takeaways Delivered on our guidance with quality growth in 2018 ✓ 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 19
Q & A
THANK YOU! CCI Investor Relations Tel: +90 216 528 4000 | Fax: +90 216 5107010 | CCI-IR@cci.com.tr | www.cci.com.tr
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