1 Investor Presentation May 2019 PUBLIC PUBLIC
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 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 PUBLIC PUBLIC
3 Agenda Overview of CCI 4 1Q19 Highlights 8 Strategic Priorities 14 Financial Highlights 23 Appendix 33 PUBLIC PUBLIC
4 Agenda Overview of CCI 1Q19 Highlights X PUBLIC PUBLIC
Overview Highlights of CCI 5 Proven track record of expansion & growth Robust performance across all key markets with solid topline growth Abundant potential in demographics Compelling NARTD* growth opportunity in our footprint Strategy, Execution and People to accelerate quality growth Disciplined financial management to deliver stakeholder value 5 PUBLIC PUBLIC
Overview The 6th Largest Bottler in the Coca- of CCI 6 Cola System, Operating in 10 Countries KAZAKHSTAN • ~400 mn people AZERBAIJAN • 26 production plants with 124 lines (2018) KYRGYZSTAN TURKEY TURKMENISTAN TAJIKISTAN • 1.5 bn UC (1) annual production capacity SYRIA • ~920 thousand sales points IRAQ • 1.3 bn UC sales volume PAKISTAN JORDAN • $ 2.3 bn revenue & $ 395 mn EBITDA Volume Breakdown (2) Revenue Breakdown (2) EBITDA Breakdown (2) Sparkling Market 8% 7% Position Turkey #1 Turkey 21% 36% #2 Pakistan 10% Turkey 44% 49% Pakistan #1 Kazakhstan Iraq #2 Kazakhstan 12% International 64% 26% Others Others 23% 6 Figures reflect FY 2018 numbers unless otherwise stated PUBLIC PUBLIC (1) Unit case, 1 UC equals 5,678 liters (2) As of FY2018
Overview A Successful Track Record of Growth of CCI 7 VOLUME REVENUE EBITDA 12% 18% 19% 10x 9x 4x CAGR 2005-2018 CAGR 2005-2018 CAGR 2005-2018 Single country in Expanding into Central Asia and JV in Pakistan in South Iraq in A regional bottler 2005 … North Iraq in 2006-2007 … 2012… today … 2008... 318 mn UC 1,315 mn UC 7 PUBLIC PUBLIC
8 Agenda Overview of CCI X 1Q19 Highlights PUBLIC PUBLIC
2018 Highlights 1Q 2019 Highlights 9 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 729 730 35.7% 17.6% 642 16.4% 26.6% 26.2% 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 9 PUBLIC PUBLIC
1Q 2019 1Q19 Highlights Highlights 10 Solid revenue and EBITDA growth Margin 31.7% 31.3% 1Q19 Grrowth YoY 21.6% 15.9% 14.4% 9.9% 8.2% 6.3% -1.8% EBIT EBITDA Gross Profit Volume Net Revenue EBITDA 1Q18 1Q19 10 PUBLIC PUBLIC
1Q 2019 Strong Momentum in Stills Highlights 11 SPARKLING STILLS TOTAL WATER NRTD TEA Unit Case Volume Growth (YoY) 1Q18 11.5% 21.4% 6.0% 21.4% 12.4% 6.8% 11.6% 6.0% -1.2% 6.3% 2018 -1.8% 14.1% 6.3% -18.5% -1.8% 1Q19 % in Total 7% 11% 67% 15% Mix (1Q19)* 11 * Totals may not foot due to rounding differences PUBLIC PUBLIC
1Q 2019 Turkey: Focus on quality growth Highlights 12 algorithm 1Q19 GROWTH YOY 36.2% +2.8% +12.4% 20.8% Cycling 14% in 1Q18 Stills growth YoY Sparkling growth YoY 8.0% 4.1% -1.5% • Smart pricing with a focus on affordability • New on-premise account Volume Volume Transactions Net EBITDA* • Higher portfolio availability in growing channels (excl. NRTD (excl. NRTD Revenue Tea) Tea) * EBITDA excluding other operating income/expense 12 PUBLIC PUBLIC
1Q 2019 International: Challenging market Highlights 13 conditions 1Q19 UC Volume Growth YoY Roar +19% 18.7% 19% excl. Kazakhstan growth YoY Turkmenistan Launched in Pakistan • Pakistan: Continued market share gains in a 10.5% 8.2% double-digit contracting market 7.1% • Central Asia: 19% growth in Kazakhstan; 26% in Azerbaijan • The Middle East: Unfavorable weather and 1Q18 1Q19 1Q18 1Q19 1Q18 1Q19 increased competion in Iraq; macroeconomic -7.7% -8.2% slowdown in Jordan Pakistan Central Asia Middle East 13 PUBLIC PUBLIC
14 Agenda Overview of CCI X Strategic Priorities PUBLIC PUBLIC
Strategic Clear Strategic Framework Priorities 15 Customer & Consumer Being the preferred partner of our Vision Values customers, offering our consumers a wide choice of products fit for every lifestyle and occasion Be the Best FMCG Company Across CREATE our Markets VALUE People Community Being a good Great place corporate citizen to work 15 PUBLIC PUBLIC
Strategic Strategic Priorities to Create Value Priorities 16 Accelerate Win at the Exercise Financial Win with People Growth Point of Sale Discipline • Full-beverage portfolio • Increase outlet coverage • Productivity savings • Integrated Talent Strategy • Revenue Growth • Working capital • Increase cooler penetration • Leadership Development Management (RGM) improvements • Right Execution Daily • High Performing Team • Expand Sparkling & Stills • Healthy FCF • E-commerce • Increase frequency • Optimum leverage • Transformation to “ OnePeople ” • Future-proof RTM • Regional strategies • Effective FX management ONE C E CCI CI 16 PUBLIC PUBLIC
Strategic NARTD Value Growth Opportunity Priorities 17 TOTAL NARTD INDUSTRY IN CCI COUNTRIES: $13BN (2018) INDUSTRY VALUE GROWTH NARTD 29% SPARKLING 51% +$4bn 9% CAGR 2018- 2021E STILLS 9% WATER 8% CCI Value Share Opportunity Source: Nielsen, Canadean and internal estimates, data as of 2018 17 PUBLIC PUBLIC
Strategic Lower per caps in CCI Countries Priorities 18 NARTD per cap* 1,428 1,176 1,0881,048 998 942 885 806 779 685 608 577 525 511 498 443 CCI average: 291 391 386 339 325 260 234 166 141 193 84 53 Source: TCCC and Canadean Estimates CCI's Share * NARTD includes sparkling soft drinks, ready-to-drink tea, energy drinks, juices, packaged water * NARTD per cap per year in terms of number of 8 ounce servings 18 PUBLIC PUBLIC
Strategic More Room to Diversify Product Priorities 19 Portfolio CATEGORY BREAKDOWN SHARE OF LOW/NO CALORIE IN SPARKLING VOLUME (2018) 27% 2018 Still 16% 7% NRTD Tea 9% Other 8% 7% 15% 6% 6% 4% 2006 3% Water 2% 2% 1% 0.3% 14% Sparkling 85% Sparkling 71% Increasing Household Double-digit growth in & Penetration No Sugar 19 PUBLIC PUBLIC
More Room to Grow… Strategic Priorities 20 Share of Immediate Consumption (IC) Packages in Sparkling Young Population in CCI countries 59% ~60% ~60% ~2x higher 50% NSR per case ~1.5x 40% higher Teen Recruitment Opportunity! Gross Margin vs. 35% FC 28% 24% Asia North World Europe, Latin CCI Pacific America Average Middle America East and Africa * Based on CCI analysis for Turkey operations 20 PUBLIC PUBLIC
Strategic Prudent Approach to Geographical Priorities 21 Expansion Guiding principles for geographical expansion • Management control & full consolidation rights • Reasonable proximity • Similar market dynamics • ROIC > WACC Volume Breakdown Kazakhstan 10% Pakistan 26% Turkey 81% Iraq 8% Others 7% 2006 International 19% Turkey 49% 21 PUBLIC PUBLIC
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