March 2019 Investor Presentation
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Ownership Structure 100% 50.3% BEER OPERATIONS SOFT DRINK OPERATIONS 24% Public 33% -Turkey Beer Operations 3.0% -International Beer Operations (EBI) Public 26.7% 50% Russia 50.3% 100% Kazakhstan 96.9% Moldova 43% 100% Georgia 20.0% 50% Ukraine 3
Anadolu Efes At a Glance 690 mn consumers 10.7 ** billion litres sales volume 21 Breweries* & 26 Bottling Plants 18.7 ** billion TL sales revenue Europe’s 6 th , 3.1 ** billion TL EBITDA World’s 16 th largest brewer 6 th largest Coca-Cola bottler 1.1 ** billion TL Free Cash Flow Strategic partnerships with world giants * In 16 countries where we have production or sales&distribution network 4 ** FY2018
4Q2018 Highlights THROUGHOUT THIS PRESENTATION ‘ PROFORMA ’ MEANS FIGURES INCLUDING ABI RUSSIA AND ABI UKRAINE STARTING FROM APRIL 1ST. Volume growth of 1.9% * Revenue up by 30.6% * • Growth in both beer and soft • Higher volumes drinks operations • Price increases • Positive currency translation impact EBITDA (BNRI) slightly down by Net profit of TL 147.9 million in 4Q2018 & 2.3% * TL 96.9 million in FY2018 • In line with our guidance • Non-cash FX losses • y-o-y higher interest expense In FY2018, • Consolidated net debt to EBITDA (BNRI) 1.5x • Free Cash Flow of over TL1.0 billion 5 * On a y-o-y and proforma basis
Consolidated results are in line with guidance… EBITDA (BNRI) & NET SALES REVENUE SALES VOLUME EBITDA (BNRI) Margin 17.1% 16.5% 106.5 18,689.7 101.7 14,587.1 3,089.8 2,492.2 mn TL mn TL mhl FY2017 FY2018 FY2017 FY2018 FY2017 FY2018 Proforma Proforma Proforma 13% 5% 10% Turkey Beer Share of* 33% 28% 25% International Beer 57% 60% 70% Coca-Cola Icecek 2017 proforma figures include ABI Russia and ABI Ukraine effect starting from April 1 st . 6 * Breakdowns are on a combined basis
Strong Competitive Advantages Diversified business model including beer and soft drinks Strategic Partnership with World’s leading FMCG companies; AB InBev & TCCC Expertise & Know-how in driving cost efficiencies Strong regional player powered by proven local know-how Solid , consistent financial performance and strong track record 7
Solid Cash Flow Generation Focus on profitability margins Smart Capex Planning Tight Working Capital Management Beer Group FCF Anadolu Efes FCF 1,054 443 TL million TL million 376 70 45 2018 2013 2013 2018 8
BEER OPERATIONS
BEER Group Strategy Excell in customer Build competitive advantage Focus on employees, Provide choice and through lean and customers, regulators, collaboration availability and innovation to consumers: efficient operations community and environment point of sale activation Grow brand love B rands E xecution E fficiency R elations 10
Efes Beer Group At a Glance #1 More than 80 brands 6 th 16 th Since 1969 in our markets ~ 300m consumer Largest in Europe Largest in the World Turkey, Kazakhstan Moldova, Georgia (Russia, Ukraine #2) 80+ 6 21 9.200+ Employees Export countries Operation countries Breweries Turkey, Russia, Kazakhstan 11 Moldova, Georgia, Ukraine 11
Beer Operations Turkey Russia Kazakhstan Moldova Georgia Ukraine 12
Markets With Low Per Capita Consumption & High Growth Potential Developing economies Low per capita consumption Per capita consumption (litre)* Turkey 11 Greece 36 Germany 100 USA 71 Young populations Canada 55 Ukraine 42 Serbia 65 Russia 57 Romania 98 Poland 100 29 Moldova Georgia 30 Czech Republic 149 Westernization/urbanization Bulgaria 75 Kazakhstan 30 China 35 Efes operations *GlobalData 2018 13
Turkish Beer Market & Efes Turkey Turkish Beer Market • Low per capita consumption of 11 liters* offering a growth potential • Growing population with 1.5% annual growth rate in 2018 47% is below age 30 • Returnable market enabling higher operational profitability Efes Turkey • 3 Breweries & 2 Malteries & 1 Hops Processing Facility • 60% market share** • 100% brand awareness for “Efes Pilsen” • Rich portfolio of local, imported & licensed brands covering all segments • #1 in consumer spending in Food & Beverage category – 7.2% in 2018*** • 99% penetration in alcohol selling stores in Turkey*** * GlobalData **Volume share FY2018, Nielsen ***Nielsen 14
Russian Beer Market Market Shares 1 29.2% World’s Big 3 5 th largest 2 27.9% account for 70% Per capita 12.8% consumption 2 57 lt 4.4% 25.8% Others 15 15 1 Nielsen Urban Russia (10 000+) FY 2018 2 GlobalData , 2018
Purpose of ABI-Efes Deal in Russia & Ukraine Geographical diversification Being strong #2 Further growth in Russia & Ukraine Potential synergies Opportunity to increase distribution Complementary strong brand portfolio Enhancing relationship between Anadolu Efes & AB InBev 16
Synergies Main synergies to be derived from Procurement Zero-Based Budgeting Expected to generate USD 80-100 million cost synergies annually Full capture by the end of 2020 Production G&A (cross-brewing) Route-to- market 17
Other International Beer Operations Kazakhstan Market leader with 51% share * Moldova Market leader with 63% share ** Georgia Market leader with 46% share *** Ukraine 2 nd player with 33% share * As of FY2018 (Ukraine:9M2018) 18 * Nielsen ** Company estimates *** Gamma Retail Audit
Commitment to Environment ENERGY AND EMISSIONS MANAGEMENT 15%+9% Compared to 2008, we consumed 15% less energy and generated 9% fewer greenhouse gas emissions per unit product. OPERATIONAL RELIABILITY 97% Trained Dealers and Distributors In 2017, we provided a 2 hour per person, 548 person/hours in total, training to our dealers and distributors. WATER MANAGEMENT 38% Decrease in Total Water Consumption Compared to 2008, we consumed 38% less water in production and 41% less water in waste water discharge PROCUREMENT MANAGEMENT 72% Material from Contract Farmers Compared to the previous year, in 2017, we sourced 72% of our raw material need from contract farmers. We provided 1,600 total hours of training to 200 manufacturers as part of the Contract Purchase Model. 19
SOFT DRINK OPERATIONS Strictly Confidential 20
CCI is the 6th Largest Bottler in the Coca-Cola System, Operating in 10 Countries Overview • ~400 mn people KAZAKHSTAN • 26 production plants with 124 lines • 1.5 bn UC (1) annual production capacity AZERBAIJAN • ~920 thousand sales points KYRGYZSTAN TURKEY TURKMENISTAN TAJIKISTAN • 1.3 bn UC sales volume • SYRIA TL 10.6 bn revenue & TL 1.9 bn EBITDA IRAQ PAKISTAN JORDAN (1) Unit case, 1 UC equals 5,678 liters (2) As of FY18 21
Coca-Cola İçecek – Opportunities NARTD Industry Value Growth & More Room to Diversify Product Opportunity Portfolio Share of Low/No Calorie in Sparkling Volume (2018) 22
Coca-Cola İçecek – Strategic Priorities 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 improvements • Increase cooler penetration • Leadership Development Management (RGM) • Healthy FCF • Right Execution Daily • High Performing Team • Expand Sparkling & Stills • Optimum leverage • E-commerce • Increase frequency • Transformation to • Effective FX management • Future-proof RTM “ OnePeople ” • Regional strategies ON ONE CC E CCI I 23
FINANCIALS & OUTLOOK
Robust p erformance in a transformational year… ANADOLU EFES TOTAL BEER TURKEY BEER EBI Net Sales 28% 18,690 14,587 30% 8,067 35% 18% 6,195 6,158 4,576 1,870 1,588 FY2017 Proforma FY2018 FY2017 Proforma FY2018 FY2017 FY2018 FY2017 Proforma FY2018 38.5% 45.7% 42.9% 40.8% 37.4% 38.4% 59.2% 56.4% Margin: Gross Profit 6,985 5,600 25% 22% 3,464 27% 2,831 12% 2,369 1,866 1,054 941 FY2017 Proforma FY2018 FY2017 Proforma FY2018 FY2017 FY2018 FY2017 Proforma FY2018 Margin: 17.1% 16.5% 18.0% 15.1% 24.6% 21.2% 16.4% 14.0% EBITDA (BNRI) 3,090 24% 2,492 9% 15% 1% 1,219 1,113 863 751 397 391 FY2017 Proforma FY2018 FY2017 Proforma FY2018 FY2017 FY2018 FY2017 Proforma FY2018 2017 proforma figures include ABI Russia and ABI Ukraine effect starting from April 1 st . 25
Leverage ratios at healthy levels despite currency devaluations… Net Debt / EBITDA (BNRI) Maturity Schedule 522 Anadolu Efes Consolidated 500 -62% of cash is hold as hard currency 1.5 1.5 M USD 268 times -85% of debt is in hard currency 141 168 110 (58% of our debt is hedged through 43 Net Investment Hedge and CCS) FY2017 FY2018 19 17 Proforma -78% of debt has fixed interest 2023 2024 2022 2020 2021 2019 Beer Group BEER CCI Easily manageable debt repayment schedule 1.5 1.5 times -69% of cash is hold as hard currency -86% of debt is in hard currency Weighted average maturity of debt for (76% of our debt is hedged through Beer Group is ca. 3* years and Net Investment Hedge) FY2017 FY2018 Anadolu Efes is ca. 4* years -81% of debt has fixed interest Proforma Trailing 12 month EBITDAs include ABI Russia and ABI Ukraine effect for the Figures represent principal amounts 26 whole 12 month period. *Excluding shareholder loans
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