1 INVESTOR PRESENTATION June 2020 PUBLIC PUBLIC
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- Important factors that could cause actual results to differ materially from CCI’s expectations looking statements. 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
AGENDA 3 Overview of CCI 1Q20 Performance Strategic Priorities & COVID-19 Financial Highlights Sustainability Appendix PUBLIC PUBLIC
4 Overview of CCI PUBLIC PUBLIC
5 PROVEN TRACK RECORD expansion & growth in emerging markets PRESENCE IN LARGE & STRATEGY, EXECUTION, GROWING MARKETS PEOPLE NARTD* growth opportunity accelerate quality growth DISCIPLINED FINANCIAL ABUNDANT POTENTIAL MANAGEMENT demographics deliver stakeholder value STRONG SYSTEM ALIGNMENT relationship with TCCC *Non-alcohol ready-to-drink 5 PUBLIC PUBLIC
6 Volume Breakdown 10 countries, ~400 mn people Sparkling Market Position 7% 26 production plants with 126 lines 8% TURKEY #1 KAZAKHSTAN #1 1.5 bn UC (1) annual production capacity 23% 50% PAKISTAN #2 ~780 thousand sales points IRAQ #2 11% OTHERS 1.3 bn UC sales volume Revenue Breakdown $ 2.2 bn revenue & $ 403 mn EBITDA 20% TURKEY KAZAKHSTAN 47% PAKISTAN 18% KAZAKHSTAN OTHERS 15% AZERBAIJAN EBITDA Breakdown KYRGYZSTAN TURKEY TAJIKISTAN SYRIA IRAQ TURKEY 47% 53% INTERNATIONAL JORDAN 1 Figures reflect FY19 numbers unless otherwise stated 6 PUBLIC PUBLIC (1) Unit case, 1 UC equals 5,678 liters
7 11% 18% 19% 4x 10x 12x CAGR 2005-2019 CAGR 2005-2019 CAGR 2005-2019 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 1,316 mn UC 7 PUBLIC PUBLIC
8 Maintaining Quality Growth Solid Free Cash Flow Growth TL million 36% 27% 26% 21% 19% 18% 1.079 17% 15% 13% 729 727 642 6% 4% 0% - CAGR (2005-16) 2017 2018* 2019 Cumulative 2016 2017 2018 2019 2005-2015 Volume NSR EBITDA 2019: Continuation of quality growth algorithm 2019: Record High free cash flow *Includes TFRS 15 adjustments 8 PUBLIC PUBLIC
9 Right Price Right Mix Regional Strategies IC Portfolio Availability Covid-19 Initiatives Effective discount and Optimum price/pack trade promotion architecture Optimization of SKUs management IC Share ↑ 6 pts in Turkey NSR > PCE growth (2019 vs 2014 YE) Adapting to sharp decline on IC share, on-premise channel Right Portfolio Right Channel New marketing strategies favoring Future / Home Portfolio expansion Channel prioritization Consumption Portfolio innovation Clear channel roles & objectives Portfolio diversification New price adjustments Segmented execution 9 PUBLIC PUBLIC
10 Outlet Coverage Time in Field* (as of ’19) (as of ’19) 72% 95% Over 1 million coolers ~146K new placements in 4 years (as of YE19) Call Completion Rate** Strike Rate*** (as of ’19) (as of ’19) 90% 65% Superior Execution: Be Available, Be Cold, Be Visible *Time in Field: Percentage of time spent on the field vs. total working hours **Call Completion Rate: Percentage of realized visits vs. planned ***Strike Rate: Percentage of invoiced customers vs. planned 10 PUBLIC PUBLIC
11 1Q20 Highlights PUBLIC PUBLIC
12 Volume growth due to sudden slowdown in March, despite high teens volume growth in the first 2 months Contraction in number of transactions mainly due to shutdown of on-premise channel in most markets by March Net Sales Revenue (NSR) growth and 15.8% FX neutral NSR growth due to price adjustments and despite negative mix EBITDA growth leading to 41 bps margin expansion despite termination of cash designation and negative mix FCF generation despite the challenging environment in March Sharp declines in on-premise channel, capacity utilization at 60% levels, severe SKU optimization and change in consumer habits, some of which may be permanent 12 PUBLIC PUBLIC
13 Balanced price adjustments, positive product and channel mix contributed to another year of quality growth despite challenges in our geographies Transactions 2.7% NSR 15.3% EBITDA 19.0% Volume 0.1% 12,245 2,283 1,316 1,315 9,804 9,550 10,623 1,919 Volume Transactions NSR EBITDA 2018 2019 2018 2019 2018 2019 2018 2019 EBITDA NET SALES REVENUE VOLUME 13 PUBLIC PUBLIC
14 Price adjustments, strict opex management contributed to another quarter of quality growth despite decline in number of transactions due to on-premise channel impact Transactions (0.8)% NSR 20.6% EBITDA 23.9% Volume 3.8% 239 2,622 1,847 1,832 230 397 2,174 320 Volume Transactions NSR EBITDA 1Q19 1Q20 1Q19 1Q20 1Q19 1Q20 1Q19 1Q20 EBITDA NET SALES REVENUE VOLUME Numbers exclude NRTD tea 14 PUBLIC PUBLIC
15 1Q20: 5.7% SPARKLING Growth in all markets except Jordan & Turkmenistan Promising market share gains in Pakistan and Iraq 8% STILLS 1Q20: 0.9% Cycling 14.1% growth in 1Q19 Ice Tea growth in all markets except Turkey 15% 77% Double digit growth in juice in Central Asia WATER 1Q20: 3.5% Cycling 6,3% growth in 1Q19 Continued growth in IC packages 15 PUBLIC PUBLIC
16 Growth YoY TURKEY INTERNATIONAL PAKISTAN KAZAKHSTAN IRAQ 1Q19 -1.5% -2.1% -8.2% 19.1% -4.0% 1.8% -1.5% -7.8% 13.9% 0.8% 2019 0.3% 6.6% 6.5% 15.2% -8.6% 1Q20 Share in Total Volume (1Q20) 45 Turkey 55% International 24% 16% 8% % 16 PUBLIC PUBLIC
17 1Q20 YoY Growth (%) Strong sparkling growth led to positive category mix 412 bps margin impact 18% Decrease in the on-premise channel due to Covid-19 of cash designation in 1Q19 Successful market execution 4% 0.3% EBITDA * Successful pricing initiatives VOLUME NSR EBITDA* excl. Cash Designation Quality growth momentum disrupted due to Covid-19 related mix changes -23% *EBITDA excluding other operating income/expense #1 share in Sparkling +4% -7% -6% mainly due to mainly due to our weaker juice focus on more category profitable packs 17 PUBLIC PUBLIC
18 1Q20 YoY Growth (%) Growth in all Central Asian markets except Turkmenistan 64% 6,5% volume growth in Pakistan Continued sparkling share gains in both Pakistan and Iraq Coca-Cola TM grew over the average sparkling growth in 22% every CA country (except Turkmenistan) 7% Market price adjustments and lower prices in some raw materials led to Gross and EBITDA margin expansion EBITDA * VOLUME NSR #1 KZ & AZ, #2 PK & IQ Sparkling Markets *EBITDA excluding other operating income/expense +7% +17% +1% on the back of with strong mainly due to our double digit growth growth in juice focus on more of TM Coca-Cola and ice tea profitable packs 18 PUBLIC PUBLIC
19 Pre-COVID19 Post-COVID19 Volume up by 16% No significant mix change Volume down by 31% Negative mix change 197 72% 81% 69% 68% 60 41 170 32% 28% 31% 19% First 10 weeks First 10 weeks Transactions Last 2 weeks of Last 2 weeks of Transactions First 10 weeks of 1Q19 Last 2 weeks of 1Q19 of 1Q19 of 1Q20 1Q19 1Q20 First 10 weeks of 1Q20 Last 2 weeks of 1Q20 IC FC IC FC Decline in on-premise channel is offset somewhat by the growth in the discounter segment Figures reflect sell-in numbers & excluding NRTD tea 19 PUBLIC PUBLIC
20 Strategic Priorities & COVID-19 PUBLIC PUBLIC
21 Our Vision Values 21 PUBLIC PUBLIC
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