Turkey - Coca Cola İçecek

cci.com.tr

Turkey - Coca Cola İçecek

Bank of America Merrill Lynch

12th Annual Turkish Equity

1-1 Conference

January 16-19, 2012

London & New York


Business Overview &

Strategy

Operational Review

Financial Review

Appendix


CCI at a Glance

6th largest bottler in The Coca-Cola system

Operations under a wide geographical area;

Turkey, Central Asia, Middle East & Pakistan

Core business is to produce, sell and distribute

sparkling and still beverages of The Coca-Cola

Company

Shareholder Structure

Publicly Held

25.6%

TCCC (2)

20.1%

Özgörkey

4.0%

Anadolu Efes

(1)

50.3%

(1) Anadolu Efes and its fully-owned subsidiaries

(2) TCCC and its fully-owned subsidiaries

3


Evolution of CCI

2004 2005 2006 2007 2008 2009 2010

Merger

with Efes

Invest

Countries with CCI Operations 1 7 8 9 10 10 10

*

Population Served (mn) 71 106 140 170 335 348 363

Number of Operating Plants 5 11 12 12 20 20 20

Employees 1.676 3.909 4.178 4.882 8.542 8.451 8.628

* Source:EIU

4


Median Age

5

Future Opportunities

45

40

Russia

35

Italy

2010 Sparkling Beverages Consumption vs Median Age

Germany

Greece

Hungary

Spain

UK

Bulgaria

Poland

USA

30

25

20

Kyrgyzstan

Tajikistan

Pakistan

Afghanistan

Kazakhstan

Azerbaijan

Turkmenistan

Egypt

Syria

Iraq

Turkey

South Africa

Libya Oman

Jordan Saudi Arabia

Kuwait

UAE

Qatar

Argentina

Mexico

15

Yemen

0 20 40 60 80 100 120 140 160 180

PerCap Consumption (L)

Source: Wikipedia

& Canadean

CCI territory total population: 363 million

62% of our population is below 29 years of age


6

Our Focus Region

Turkey: 8 plants

Int’l:12 plants

CCI

Kazakhstan

16m

Other

CCI Plants

Libya

6m

Black Sea

Lebanon

4m

Egypt

79m

Turkey

74m

Syria

23m

Jordan

6m

Georgia

4m

Iraq

31m

Azerbaijan

9m

Kuwait

Saudi Arabia

25m

Qatar

Iran

75m

U.A.E.

5m

Uzbekistan

29m

Turkmenistan

5m

Oman

3m

Afghanistan

27m

Pakistan

186m

Kyrgyzstan

6m

Tajikistan

8m

Source: EIU & TUIK & UN

Note: 2010E Population

Yemen

24m


Leading Brands and Market Positions

Turkey Pakistan Kazakhstan Azerbaijan Kyrgyzstan Turkmenistan Jordan Syria Iraq

68.9%

#1

28.7%

#2

34.2%

#1

56.2%

#1

n.a.

#1

n.a. 12.2%

#2

8.9%

#2

n.a.

24.5%

#1

1.1%

#9

8.1%

#3

6.1%

#5

9.2%

#2

9.6%

#3

6.6%

#3

54.5%

#1

*2010 Market Shares

7


8

Outstanding Performance

Consolidated Sales Volume Consolidated Net Sales Consolidated EBITDA

(million uc)

(million TL)

(million TL)

665

2,753

435

275

1,032

2004 2010

2004 2010

142

2004 2010

• Strong double digit volume growth

• Net revenue growth exceeding volume growth

• EBITDA growth exceeding net revenue growth


Business Overview &

Strategy

Operational Review

Financial Review

Appendix


Volume up by 14.5% in 2011

Turkey Volume International Volume Consolidated Volume

(Unit cases in millions) (Unit cases in millions) (Unit cases in millions)

665.4

761.7

494.4

546.8

171.0

215.0

2010 2011

2010

Tea

7.8%

2010 2011

Volume Split Y/Y

2011

Still

19.5%

Tea

8.3%

Still

20.9%

2010 2011

Sparkling

72.7%

Sparkling

70.8%

10


Operational Review, Turkey – 2011

Turkey sales volume up by 11%

‣ Strong growth in all categories

‣ Channel and category based marketing

activities

‣ Increased cold availability

‣ Customer segmentation

Sparkling category posted ca. 5% growth

‣ Promotions

‣ Portfolio expansion

‣ Marketing activities

Still category grew above 20%

‣ Strong demand to new launches

‣ Growing water & tea category

11


Operational Review, Int. Markets – 2011

International Operations’ share in total sales

volume reached 28.2%

International volume sustained strong growth

momentum

‣ New product launches

‣ RTM improvements

‣ Increased cooler investments

‣ Marketing campaigns

Central Asia operations grew close to 20%

‣ Kazakhstan volume up over 25%

‣ Azerbaijan volume grew at low single digits

Iraq continued strong growth trend over 25%

Pakistan grew in high-teens

Volume split (uc) – Int.

(2011)

Iraq

11%

Turkmenistan

6%

Jordan

6%

Kyrgyzstan

5%

Kazakhstan

25%

Pakistan

34%

Syria 1%

Iraq 3%

Jordan 7%

2011

Syria

1%

2010

Turkmenist

an 7%

Azerbaijan

15%

Pakistan

31%

Kazakhstan

24%

Kyrgyzstan

5%

Azerbaijan

19%

12


Product Launches in 2011

* Burn Blue * Gladiator

Turkey Turkey

**Coca-Cola

200 ml

Turkey

**Ramadan

Sherbet

Turkey

**Cappy

Pulpy Orange

Turkey

**Six new flavoured tea

Turkey

***Cappy

Ananas

Turkey

***Damla ***Damla Minera

330 ml&750 ml 330 ml&750 ml

Turkey Turkey

* Cappy Mango **Fanta **Minute Maid **Burn

Jordan Lemonade Pulpy Tropical Kazakhstan

Kazakhstan

Pakistan

**Burn PET

Azerbaijan

**Fanta **Bonaqua-5lt

Green Apple Azerbaijan

Azerbaijan

**Coke Zero

Kazakhstan

Azerbaijan

***Fanta

Lemonade

Kyrgyzstan

***Burn Pet

400ml

Kazakhstan

*1Q2011 launches

** 2Q2011 launches

***3Q2011 launches

13


Business Overview &

Strategy

Operational Review

Financial Review

Appendix


Net sales up by 23.1% in 9M11

Turkey Net Sales

Turkey Net Sales International Net Sales Consolidated Net Sales

(TL in millions) (US$ in millions) (TL in millions)

1,721.6

2,026.5

332.9

455.3

2,224.0

2,738.0

9M10

9M11

9M10

9M11

9M10

9M11

• Strong revenue growth on the back of robust volume growth in 9M2011

‣ Consolidated sales volume up by 16.0% to 621.1 ml uc

Turkey operation’s volume up by 12.8% to 449.9 ml uc

‣ International operations volume up by 25.5% to 171.3 ml uc

• Consolidated net revenue per case increased by 6.1% to TL 4.41

Turkey net revenue per case was up by 4.3% due to

• International net sales per unit case increased by 8.9% to US$ 2.66

15


EBITDA up by 7.2% in 9M11

Turkey Net Sales

Turkey EBITDA International EBITDA Consolidated EBITDA

(TL in millions) (US$ in millions) (TL in millions)

*

18.6%

15.6%

* *

17.8%

15.5%

18.0%

15.7%

319.9 315.1

399.8 428.5

59.1

70.6

9M10

* EBITDA Margin

9M11

9M10

9M11

9M10

9M11

• Gross Profit Margin contraction in Turkey and international operations as a result of

‣ Higher resin, can, and sugar prices

‣ Sharp depreciation in TL in Turkey

• Bottom line was impacted from higher non-cash FX loss

16


Income Statement

(TL mn) 2009 2010 9M2010 9M2011

Volume 586.5 665.4 13.5% 535.3 621.1 16.0%

Turkey 438.9 494.4 12.6% 398.9 449.9 12.8%

International 147.6 171.0 15.9% 136.4 171.3 25.5%

Net Revenue 2,407.5 2,753.2 14.4% 2,224.0 2,738.0 23.1%

Turkey 1,868.2 2,121.4 13.6% 1,721.6 2,026.5 17.7%

International 349.9 422.8 20.8% 332.9 455.3 36.8%

EBIT 236.5 271.8 15.0% 286.2 312.4 9.2%

Turkey 204.6 240.3 17.4% 243.9 242.7 (0.5%)

International 20.3 28.6 40.8% 34.6 43.2 24.8%

EBITDA 368.7 435.0 18.0% 399.8 428.5 7.2%

Turkey 296.6 342.5 15.5% 319.9 315.1 (1.5%)

International 47.1 69.5 47.7% 59.1 70.6 19.4%

Net Income 169.6 197.7 16.6% 239.3 146.3 (38.9%)

Turkey 164.3 191.3 16.4% 216.9 100.0 (53.9%)

International 3.4 11.3 236.0% 20.9 26.9 28.9%

17


Income Statement

(TL mn) 2009 2010 9M2010 9M2011

Gross Profit Margin 36.1% 37.5% 38.3% 36.8%

Turkey 37.5% 39.8% 40.1% 39.2%

International 31.1% 29.5% 32.2% 28.8%

Opex Margin (26.3%) (27.6%) (25.5%) (25.4%)

Turkey (26.5%) (28.5%) (25.9%) (27.3%)

International (25.3%) (22.9%) (21.8%) (19.3%)

EBIT Margin 9.8% 9.9% 12.9% 11.4%

Turkey 11.0% 11.3% 14.2% 12.0%

International 5.8% 6.8% 10.4% 9.5%

EBITDA Margin 15.3% 15.8% 18.0% 15.7%

Turkey 15.9% 16.1% 18.6% 15.6%

International 13.5% 16.4% 17.8% 15.5%

Net Income Margin 7.0% 7.2% 10.8% 5.3%

Turkey 8.8% 9.0% 12.6% 4.9%

International 1.0% 2.7% 6.3% 5.9%

18


Financial Expenses

Financial Income / (Expense) Breakdown 9M11 9M10

(TL million)

Interest income 26.2 28.5

Interest expense (-) (43.5) (36.3)

Foreign exchange gain / (loss) 20.0 (2.7)

Realized FX gain / (loss) - Borrowings (0.3) (1.1)

Unrealized FX gain / (loss) - Borrowings (128.2) 28.7

Gain / (loss) on derivative transactions (0.1) (0.5)

Financial Income / (Expense) Net (125.9) 16.6

19


Debt Structure

Million 9M11 FY10 ∆

USD denominated* 633 548 15%

EURO denominated* 43 43 0%

TL denominated 44 294 (85%)

Other (in USD terms) 39 10 288%

Total Financial Debt

in TL 1,391 1,246 12%

Total Cash &

Equivalent in TL 187 599 (69%)

Net Debt in TL 1,204 647 86%

Net Debt in US$ 652 418 56%

Maturity

Date

2011 2012 2013 2014 2015 2016

% of total debt 11% 2% 2% 82% 2% 1%

*In original currency

20


Appendix

Corporate Structure

Cooler Investments

Country Data

Geography & Portfolio Breakdown

Turkey AFB Market

Tea Market Segments in Turkey

Trade Structure in Turkey

Turkey Operational Efficiencies

Financials


Corporate Structure

Coca-Cola İcecek A.S.

100.00%

Coca-Cola Satış ve Dağıtım

A.Ş., Turkey

99.96%

CCI International Holland B.V.

The Netherlands

Mahmudiye Kaynak Suyu

Ltd. Şti., Turkey

99.99%

50.95%

Coca-Cola Almaty Bottlers

LLP, Kazakhstan

48.77%

Efes Sınai Dış Ticaret

A.Ş., Turkey

99.00%

83.55%

70.49%

Azerbaijan Coca-Cola Bottlers

Ltd., Azerbaijan

Coca-Cola Bishkek Bottlers

CJSC, Kyrgyzstan

16.31%

29.51%

Turkmenistan Coca-Cola

Bottlers Ltd., Turkmenistan

Coca-Cola Beverages

Pakistan Ltd., Pakistan

59.50%

49.22%

The Coca-Cola Bottling

Company of Jordan Ltd.,

Jordan

Syrian Soft Drink Sales and

Distribution L.L.C., Syria

90.00%

50.00%

The Coca-Cola Bottling of Iraq

FZCO, U.A.E.

100.00%

60.00%

SSG Investment Limited,

Iraq

100.00%

40.00%

CC Beverage Limited,

Iraq

22


Cooler Investments

Cooler Doors per 10,000 people

Turkey Pakistan Kazakhstan Azerbaijan Kyrgyzstan Jordan Iraq Syria

2007 51 - 18 7 - - 2 -

2008 52 7 20 7 - - 4 -

2009 54 9 21 7 - - 4 -

2010 60 11 23 10 - - 5 7

CCI increases its cooler doors capacity every year in every country to serve cool beverages to our consumers

23


Country Data

Population

(mn) in

2010

% of

population

below 29

years

GDP per

capita in 2010

($)

Per capita

consumption

of sparkling

bev. (L) in

2010

CCI’s market

share in

sparkling

bev. in 2010

2010

Volume

(mn uc)

Volume

Growth in

2010

Turkey 73.7 51% 10,079 44.0 69% 494 13%

Pakistan 185.5 65% 1,049 11.0 29% 118 8%

Kazakhstan 16.2 51% 8,326 20.9 34% 43 23%

Azerbaijan 9.0 51% 5,765 27.6 56% 32 19%

Iraq 31.4 68% 2,626 21.8 - 20 34%

Jordan 6.4 68% 4,435 52.2 12% 12 -10%

Turkmenistan 4.9 59% 3,663 26.1 - 11 85%

Kyrgyzstan 5.5 58% 816 11.0 - 8 21%

Syria 22.5 65% 2,892 24.1 9%* 5 -15%

Tajikistan 7.7 68% 732 1.4 - - -

Sources: TUIK, IMF, EIU, UN Estimate, TCCC, Nielsen *MEMRB

24


Geography and Portfolio Breakdown

Volume split (uc) - Category

Volume split (uc) - Geography

Still 15%

Tea

8%

Still

20%

2005 2010 2005

2010

Int.’l

17%

Int.’l

26%

Sparkling 85% Sparkling 72%

Turkey 83% Turkey 74%

International

15%

Revenue Split

78%

International

23%

International

15%

EBITDA Split

International

21%

2005 2010 2005

2010

Turkey

85%

Turkey

77%

Turkey

85%

Turkey

79%

25


Turkey AFB Market

AFB Market (exc. milk)

4.9 billion uc

RTD AFB Market (exc. milk)

1.1 billion uc

Tea

48%

Hot Coffee

2%

Powder&Concentrate

1%

Hot Coffee

2%

Powder&Concentrate

1%

Bottled Water

32%

Bot

RTD AFB

24%

RTD AFB

24%

Sparkling Beverages

46%

Sparkling Beverages

46%

Fruit Juice&Still

Drinks

12%

Fruit

D

HOD

25%

HOD

25%

Other

1%

Ayran

3%

Sparkling Water 6%

Other Ayran

1% 3%

Sparkling Water 6%

Source: Canadean, 2010

Hot tea category constitutes 48% of alcohol-free beverages

26


Tea Market Segments in Turkey

Volume

2.4 bn uc

Value *

0.8 bn $

Teapotbag

3,6%

Teabag

1,2%

Teapotbag

6,6%

Teabag

5,3%

Loose

95,2%

Loose

88,0%

Source: Nielsen, 2010

Source: Nielsen, 2010

Very high levels of hot tea consumption

• Has the highest share of throat after tap water

• 96% of Turkish people drink tea everyday

• World’s highest per capita consumption

• Nielsen datas are excluding on-premise consumption

channels

27


Trade Structure in Turkey

Retail Volume by Channel (2010)

Hypermarket

2.6%

Discount Store

4.9%

Other 2.4% Gas Station 1.8%

28

On Premise

14.0%

Traditional

Grocery 48.3%

Supermarket

26.0%

Half of volume delivered by traditional trade channels

Highest retail coverage among all FMCG categories in Turkey

*Other includes game houses, entertainment,

gymnasium, travel, accomodation, transportation,

education, workplace and military.

Source: Company


Turkey Operational Efficiencies

Water usage ratio (lt water/lt product)

2,00

1,50

1,74

1,62

1,48 1,50

1,42

1,00

2006 2007 2008 2009 2010

Annual production capacity of 978 mn unit

cases

Energy usage ratio (MJ lt of product)

0,30

0,28

0,26

0,24

0,22

0,20

0,26 0,26

0,23 0,23

0,22

2006 2007 2008 2009 2010

Annual production of more than 2 billion

PET bottles

29


Income Statement - Consolidated

(TL mn) 2009 2010 2010 vs 2009 9M10 9M11 9M11 vs 9M10

Volume (m/uc) 586.5 665.4 13.5% 535.3 621.1 16.0%

Net Sales

2,407.5 2,753.2 14.4% 2,224.0 2,738.0 23.1%

COGS (1,538.9) (1,721.6) 11.9% (1,371.7) (1,730.3) 26.1%

Gross Profit 868.7 1031.5 18.7% 852.3 1,007.7 18.2%

OPEX (661.0) (750.1) 13.5% (559.2) (700.6) 25.3%

Other Inc/Exp (Net) 28.8 (9.6) n.m. (6.9) 5.4 (177.5%)

EBIT

236.5 271.8 15.0% 286.2 312.4 9.2%

EBIT (exc. other) 207.7 281.4 35.5% 293.1 307.1 4.8%

Income Before Minority Int. & Tax 215.4 255.3 18.5% 302.8 186.5 (38.4%)

Minority Interest 0.4 (0.7) n.m. 0.9 0.4

Income Tax (46.2) (56.9) 23.2% (62.6) (39.8) 36.4%

Net Income/(Loss) 169.6 197.7 16.6% 239.3 146.3 (38.9%)

EBITDA 368.7 435.0 18.0% 399.8 428.5 7.2%

EBITDA (exc. other)

350.2 444.5 26.9% 406.7 425.2 4.6%

Gross Margin 36.1% 37.5% 38.3% 36.8%

EBIT Margin

9.8% 9.9% 12.9% 11.4%

EBIT Margin (exc. other)

8.6% 10.2% 13.2% 11.2%

EBITDA Margin

15.3% 15.8% 18.0% 15.7%

EBITDA Margin (exc. other)

14.5% 16.1% 18.3% 15.5%

30


Balance Sheet – 9M11/YE10

(TL million)

September

September 30, December

December 31, 2010

(TL million)

30, 2011

2011 31, 2010

(unaudited) (audited) (unaudited) (audited)

Cash & Cash Equivalents 175.9 491.7 ST Borrowings 178.1 627.7

Investments in Securities 11.1 107.1 Trade Payables 184.5 99.3

Trade Receivables and

Due from Related Parties 460.7 300.0 Due to Related Parties 75.5 45.0

Inventories 357.2 223.7 Other Payables 106.3 80.9

Other Receivables 11.3 4.8 Provision for Corporate Tax 14.1 1.0

Other Current Assets 316.8 166.6 Provision for Employee Benefits 22.5 14.4

Total Current Assets 1,333.0 1,293.8 Other Liabilities 29.4 12.4

Property, Plant and

Equipment 1,596.7 1,203.0 Total Current Liabilities 875.0 880.6

Intangible Assets

(including goodwill) 579.6 459.4 LT Borrowings 1,212.9 617.9

Deferred Tax Assets 6.1 2.5 Provision for Employee Benefits 33.3 35.7

Other receivables and

non-current assets 45.0 55.3 Other Liabilities 0.0 3.6

Total Non-current

Assets 2,227.4 1,720.2 Deferred Tax Liability 43.4 41.1

TOTAL ASSETS 3,560.4 3,014.0 Total Non-Current Liabilities 1,289.6 698.4

Minority Interest 21.3 17.6

Shareholders Equity 1,639.0 1,417.4

TOTAL LIABILITIES and

SHAREHOLDER’S EQUITY 3,560.4 3,014.0

31


Balance Sheet – 2010/2009

(TL million)

Assets

December 31,

2010

December 31,

2009

Liabilities & Equity

December 31,

2010

December 31,

2009

Cash & Cash

Equivalents

491.7 544.2 ST Borrowings 627.7 903.6

Investments in

Securities

107.1 40.3

Trade Payables and

Due to Related Parties

144.3 123.5

Trade Rec and Due

from Related...

300.0 245.6

Other Payables

80.9 81.5

Inventories 223.7 211.1 Other Liabilities 27.8 28.9

Other Receivables 4.8 2.9 Total Current Liabilities 880.6 1,137.6

Other Current Assets 166.6 141.8

Total Current

Assets

Property, Plant and

Equipment

Intangible Assets (Incl

Goodwill)

1,293.8 1,185.9

1,203.0 1,190.4

459.4 450.3

Deferred Tax Assets 2.5 1.1

Other rec and noncurrent

assets

Total Non-current

Assets

LT Borrowings 617.9 385.0

Provision for Empl Benefits 35.7 28.7

Other liabilities 3.6 3.6

Deferred Tax Liability 41.1 38.8

Total Non-current

Liabilities

698.4 456.1

55.3 36.0 Minority Interest 17.6 16.5

1,720.2 1,677.7 Shareholders Equity 1,417.4 1,253.4

Total Assets 3,014.0 2,863.6

TOTAL LIABILITIES AND

SHAREHOLDER’S

EQUITY

3,014.0 2,863.6

32


Free Cash Flow

(TL mn) 2010 2009

Cash Flow From Operating Activities

Net Income Adj for Non-Cash Items 459.2 358.6

Interest Paid (48.1) (35.1)

Interest Received 38.5 25.3

Taxes Paid (60.3) (22.8)

Employee Termination Benefits,

Vacation Pay, Mngmt Bonus

(22.2) (19.3)

Operating Cash Flow 367.2 306.8 19.7%

Change in Working Capital (96.8) (73.4)

Operating Cash Flow post Change in WC 270.4 233.3 15.9%

Cash Flow Investing Activities

Property, Plant and Equipment (159.6) (160.3)

Free Cash Flow 110.8 73.1 51.6%

33


January 2012

Glossary

AFB: Alcohol Free Beverages

CAGR: Compound Annual Growth Rate

CMB: Capital Markets Board of Turkey

HOD: Home and Office delivery water

OWB: One Way Bottle

RTD Ready-to-Drink Beverages

UC: Unit Case (1 uc equals 5.678 liters)

YTD: Year to Date

Coca-Cola Icecek Investor Relations

Tel: +90 216 528 4000

Fax: +90 216 365 8457

CCI-IR@cci.com.tr www.cci.com.tr

------------------------------------

Deniz Can Yücel

Investor Relations Manager

Tel: +90 216 528 3386

deniz.yucel@cci.com.tr

Credit Rating

Foreign Currency Senior Unsecured rating and IDR

‘BBB-’, Stable Outlook

Local Currency Senior Unsecured and IDR,

‘BBB’, Stable Outlook

(Fitch Rating, Nov. 24, 2011)

Corporate Governance Rating of 8.50 (out of 10)

(Saha Rating, July 1, 2011)

Istanbul Stock Exchange: CCOLA.IS

Bloomberg: CCOLA TI

Reuters: CCOLA.IS

More magazines by this user
Similar magazines