BEEROPERATIONS BEER OPERATIONS 1H2010 Results Conference Call Presentation Can ID: 831246
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Anadolu Efes BEEROPERATIONSBEER OPER
Anadolu Efes BEEROPERATIONSBEER OPERATIONS1H2010 Results Conference Call PresentationCanÇaka26.08.2010 Forward-Looking StatementsLooking StatementsThispresentationmaycontaincertainforward-lookingstatementsconcerningourfutureandshouldbconsideredasgoodfaithestimatesmadebytheCompany.Theseforward-lookingstatementsreflectmanagementexpectationsandarebaseduponcurrentlyavailabledata.Actualresultsaresubjecttofutureeventsanduncertainties,whichcouldmateriallyimpacttheCompanysactualperformance.GlOi&OtiPfGlOi&OtiPfGeneraOverviOOverviOBeer Sales Volume DevelopmentBeer Sales Volume Development-Total Beer Volume Development11.312.011.312.06.77.6mhl4.54.41H20091H2010TurkeyBeerOperationsIttilO
titernaonaBeerOperaonsTotal Beer
titernaonaBeerOperaonsTotal Beer SalesTotalbeersalesvolumeincreasedby6.8%in1H2010;up9.6%in2Q2010SalesvolumeinTurkeybeeroperationsdeclinedby2.8%in1H2010;up1.0%in2Q2010SalesvolumeinEfesBreweriesInternational(EBI)increasedby13.2%in1H2010;p14.8%in2Q2010TURKEYTURKEYSalesVolumeGrowthintheSecondQuarterSalesVolumeGrowthintheSecondQuarterSalesVolume Volume Volume DevelopmentSales RevenueDevelopment4.54.4RL m677.41H20091H20101H20091H2010Others11.3%lesvoumeTeyee1.0%i2Q2010ontopofa7.9%declinein1Q2010,contributedbyslighteconomicrecoveryMarket Share by Volume-1H2010CAnadoluEfes88.7%continuedimpactofhigherpricesduetoexcisetaxincrease14%increaseinaveragesalespricesbyt
hebeginningofompany, YTD 2010toreflect
hebeginningofompany, YTD 2010toreflect35%hikeinexcisetaxeslowerthanbeerpriceincreasesforotheralcoholicunfavorableweatheconditionsinJune* The Nielsen Company has made a revision in its sample universe and started to cover 72 cities instead of 36 cities as of June 2010. June 2010EFES BREWERIES INTERNATIONALEFES BREWERIES INTERNATIONALAcceleratedGrowthintheSecondQuarterAcceleratedGrowthintheSecondQuarterAccelerated Volume DevelopmentSales RevenueDevelopment416.9472.06.77.6m U1H20091H20101H20091H2010EBIreportedacceleratedvolumegrowthinalloperationsleadingtoa14.8%riseinconsolidatedsalesvolumein2Q2010y-o-y,contributedby;continuousinitiativestoincreaseavailabilitysuccessfulpractice
sinmarketinghigherbeerpricestoreflecth
sinmarketinghigherbeerpricestoreflecthighertaxesConsolidatednetsalesrevenueincreasedby14.4%in2Q2010y-o-y,bringingthefirsthalfnetsalesrevenuegrowthto13.2%y-o-y,bysubstantiallyhighervolumesandwell-plannedpriceincreasesaswellasstrongerRubleversusUSD,negativeeffectofsignificantexcisetaxhikeinRussia.Market Share Gains Continued in the Market Share Gains Continued in the SabmillerOthers6.7Volume DevelopmentMarket Share by Volume 1H2010iYTD Ju38.9%InbevHeinekenEBI10.3%6.8%6.75.35.9elsen Company, Toune 201015.8%6%1H20091H2010tal National Urban,Beermarketisestimatedtohavecontractedby10.7%in1H2010,down9.4%in2Q2010EBIssalesvolumeincreasedsignificantlyby12.2%in1H2010y-o-y1H20091H2010Mark
et Share by Volume 1H2009,Numbers may
et Share by Volume 1H2009,Numbers may not add up to 100 due to rounding.marketshareimprovedfurtherandreached10.3%in1H2010from9.3%in1H2009DesitesinificantexcisetanetsalesrevenuerinUSDSabmiller6.7%Others13.6%The Nielsen ComYTD June 2009termsremainedflatbythehelpofwellplannedpriceincreases39.7%Inbev15.8%Heineken14.9%9.3%pany, Total NationastrongerRublevsUSDleadingEBItorecord11.5%riseinnetsalesrevenuesinUSDtermsin1H2010y-o-yaNumbers may not add up to 100 due to rounding.[1]The Nielsen Company, National Urban Retail Audit Report, June YTD 2010Reflection of Excise Tax Hike into Prices in RussiaReflection of Excise Tax Hike into Prices in Russiaices, upon a 3% price increase in early Jul
yCumulative compounded average price i
yCumulative compounded average price increase since November 2009 reached to 25%EBIs Price Increases* in Russia3%CUMULATIVE PRICE INCREASE SINCE NOV. 2009: 25%5%4.8%4.8%4.8%Nov.2009Jan.2010Apr.2010July*weighted average price increasesContinued Focus on Strategic Brands Synergized Continued Focus on Strategic Brands Synergized WithWithDifftifftTtdPkWithWithDifferenerenesasesanPIn the first half of 2010, continued focus on strategic brands through brand equity building, line extensions and packaging innovation have let EBI to significantly outperformthe operating markets. ...lower and upper mainstream segments in Russia in addition to a new brand launch: Dolce Iris, a ligh
t beer with Chardonnay flavor (May 2010)
t beer with Chardonnay flavor (May 2010)Line extentions and launch of new packages in other operations inadditiontolaunchofnewpositioningandpackagingofin Karagandinskoe in KazakhstanProduct innovations supported by successful local campaigns in alloperationsall givesutmosttofurtherdevelopand strengthen its brand portfolio through innovationsas we believe it is the most valuable asset of our company.FiilOiFiilOiFinancl Overview Financl Overview TURKEYTURKEYperational Snapshotperational Snap-1H2010 Performance1H2010 Performancepp1H20091H2010Growth (%)Total S
ales Volume mhl4,54,4(2,8%)Net Sales
ales Volume mhl4,54,4(2,8%)Net Sales (million TRL)690,3677,4(1,9%)Gross Profit (million TRL)466,4469,30,6% Gross Profit margin (%)67,6%69,3%172 bpsEBITDA (million TRL)298,3278,0(6,8%)EBITDA margin (%)43,2%41,0%(217 bps)NetSalesincreasedby2.4%in2Q2010y-o-y,bringing1H2010netsalesrevenuetoTRL677.4million,downasimultaneouslyintroducedaveragepriceincreaseof14%withthe35%riseinexcisetaxasofJanuary1,2010helpedAnadoluEfestokeepitsnetperlitersalespriceintactin2010GrossProfitMarginimprovedby190bpsin2Q2010y-o-y,bringing1H2010margingainto172bpsy-o-yduetolowercommoditypricesin2010reducedfixedcostsperlitercontributedbyhighersalesvolumesin2QEBITDAMarginincreasedby146bpsto43.0%in2Q2010y-o-y,duetoimprovedoperatingpro
fitabilityaslightincreaseintheratioofop
fitabilityaslightincreaseintheratioofoperatingexpensestonetsalesrevenueEBITDAmargindetoriationofonly217bpsin1H2010versus731in1Q2010,onay-o-ybasisTURKEY BEER OPERATIONSTURKEY BEER OPERATIONSPositiveFreeCashFlowGenerationPositiveFreeCashFlowGenerationPositive Positive million TRL)1H20091H2010Operating Profit 260,7 235,2 Depreciation & Amortization 33,9 37,0 Othernoncashitems3758()Other non- items7 8EBITDA 298,3 278,0 Change in Inventory9,1
3,2Change in Trade Receiva
3,2Change in Trade Receivables(184,8) (208,2)Chane in Trade Payables42,1 20,8Change in Other Assets/ Liabilities85,6 114,2 Change in Working Capital(47,9) (70,0)Income Taxes & Employee Benefits Paid(42,1) (34,0)CAPEX, net(68,4) (50,1)MiitBOtdOthItiAtiitiuy-t and Other nvesng v2,1 (303,0)Net Financial Income (Including interest)11,6 8,9FCF153,5 (170,2)FCF excluding minority
buy-out and other investing activities1
buy-out and other investing activities151,4 132,8EFES BREWERIES INTERNATIONALEFES BREWERIES INTERNATIONALOperationalSnapshotOperationalSnapshot-1H2010Performance1H2010Performance Operational 1H20091H2010Growth (%)TotalSalesVolume(mhl)6776132%Total Sales Volume (mhl)6,77,6,Net Sales (million USD)416,9472,013,2%Gross Profit (million USD)195,5224,214,7%Gross Profit margin (%)46,9%47,5%61 bpsEBITDA (million USD)83,691,19,0%Despitethenegativeeffectofexcisetaxhikes,NetSalesincreasestayedinlinewithvolumegrowthin1H2010ythecontributionofhihervolumesandriceincreasesaswellasstronerRubleversusUSDEBITDA margin (%)20,1%19,3%(75 bps)ygp,gDespitetheph
asedreflectionofhigherexcisetaxesintopri
asedreflectionofhigherexcisetaxesintopricesandnegativemixeffectinRussia,priceincreases,lowercommoditypricesandsuccessfulcostsavinginitiativeshavelettoa61bpsincreaseinin1H2010In2Q2010,acceleratedvolumegrowthandananotherpriceincreasebythebeginningofAprilinRussiahavelettoa81bpsimprovementingrossmarginin2Q2010y-o-yOperatinglossofUSD0.8millionin1Q2010turnedintoanoperatingprofitofUSD41.0millionin2Q2010,leadingtoaUSD40.2millionoperatingprofitin1H2010EBITDAMargindeclinedby75bps,duetohigheroperatingexpensesmainlyattributabletothehighersalesvolumesandhighertransportationcostsaswellasincreasedpenetrationEFES BREWERIES INTERNATIONALEFES BREWERIES INTERNATIONALPositiveFreeCashFlowGenerationPositiveFreeCashFlowGeneration
Positive Positive (milli
Positive Positive (millionUSD)1H20091H2010Operating Profit 41,2 40,2Depreciation & Amortization 40,8 48,7 Othhiter non-cash ems7 2,2EBITDA 83,6 91,1 Change in Inventory30,7 12,5Change in Trade Receivables2,8 (21,5)Chane in Trade Payables63 69Change in Other Assets/ Liabilities11,9 (4,0)Change in Working Capital108,9 56,7Income Taxes Paid(2,5) (1,8)CAPEX(60,9)
(47,7)Capital In
(47,7)Capital Increase in Subsidiaries by Minority Shareholders(1,5) 17,5Net Financial Expense (Including interest)(31,5) (10,9)FCF96,1 104,9FCFldiitliibidiibiithhld976874FCF exclung capital increase n subsidiy minory shareers6 87,4Debt& FinancingTkBOtiTurCash & cash equivalents at 315.3 million TRL -Net debt position of 42.6 million TRLEfes Breweries InternationalConsolidated gross debt at US$ 555.1 millionCh&hilUS$1937illiNdbiiUS$3613illiC& cash equivaents at US$ .7mon-bt position at US$ .3NetFinancialDebt*-M
aturityBreakdown Debt- 2.8x EBITD
aturityBreakdown Debt- 2.8x EBITDA2.0x EBITDA20103.3%20134.7%20142.9%201135.1%2012m USD54.482.5*excluding put optionsFY20091H2010CLOSINGREMARKSCLOSINGREMARKSCLOSING FY2010 OUTLOOKFY2010 OUTLOOKTURKEY BEER OPERATIONSTURKEY BEER OPERATIONSWemaintainourguidanceoflowsingledigitdeclineinsalesvolumeinTurkeyThecombinednegativeeffectof14%averagepriceincreasetopasstheexciseexcise,-baseeffectin1Q2010alreadystartedtophaseoutasindicatedbyariseindomesticbeervolumesin2Q2010y-o-ySofterdeclineintotalTurkeyBeersalesvolumeinFY2010bythecontributionofhigherexportsalesSlightimprovementingrossprofitmarginonthebackoflowercommoditySlightcontractioninEBITDAmarginduetohigheroperatingexpensesasapercentageo
fnetsalesrevenuecontributedbylllower
fnetsalesrevenuecontributedbylllowervollackofpriceincreasetocoverCPInegativelyimpactingoperatingexpensestonetsalesratioFY2010 OUTLOOKFY2010 OUTLOOKINTERNATIONALBEEROPERATIONSINTERNATIONALBEEROPERATIONSWearerevisinreviousvolumeandoutlooksuwardsfoFY2010astheINTERNATIONAL OPERATIONSINTERNATIONAL OPERATIONSfirsthalfoftheyearwasbetterthantheoneonwhichourfullyearguidancewasbasedon8-10%volumecontractionfortheRussianbeermarketoverallmainlyduetosubstantiallysignificanttaxsignificanttaxEBIssalesvolumetogrowatarateofhighsingledigits,contributedbyStrongbrandequityIGoodexecutionIncreasingavailabilitySlightlylowenetsalesrevenuegrowthcomparedtosalesvolumegrowthduetoPhasedapproachforthepricei
ncreasestocoverthenegativeimpactofsignif
ncreasestocoverthenegativeimpactofsignificantexcisetaxincreaseUUStrongerRublevsUSDofGrossprofitandEBITDAgrowthinabsoluteterms,withflattishmarginsforboth?QUESTIONSPLEASE??QUESTIONSPLEASE?? ?? ?APPENDIXAPPENDIX010/669,335,244,1)94,9 278,010/627,002,327,076,084,374,307,283,272,969,179,124,278,784,463,195,8in s'holding06422(122034181532028226121928d 30.06.2009stated on cost basis gfromAnadoluEfe2009/6690,3466,4260,710,2270,8(51,6)219,3 298,32009/12440,6214,1105,521,5790,61281,5360,421,51673,32463,947,4139,7147,6342,4160,0160,01961,52463,9nded 30.06.2010 andries in Turkey, are scome/expensearisinand 31.12.2009RegulationsRegul
ations OPERATIONMonths Period Enpr
ations OPERATIONMonths Period Enproduction subsidiargotheroperatingin From Operations.R OPERATIONs as of 30.06.2010 aIFRS as per CMB n TRL)IFRS as per CMB on TRL)SBEFORE TAXcuritiesURKEY BEERt Items For the Six g brewing and malt pentation.perations(excludinash items up to ProfitTURKEY BEERalance Sheet Itemsn Accordance with I(millio Accordance with I (milliohectolitres)M OPERATIONSRATIONSATIONS PROFIT EARnd Investment in Secpmentetsilitiesareholders' EquityTd Income Statementbsidiaries, excludingcomprehensive preseisesofProfitfromother relevant non-cTHighlighted BaPrepared InPrepared Ines Volume (million hLES SS PR
OFIT FROOFIT FROM OPERncial Income
OFIT FROOFIT FROM OPERncial Income / ExpenNTINUING OPERvision for TaxesOFIT FOR THE YEITDA, Cash equivalents ade Receivablesntoriesr Assetsal Current Assetsstmentserty, Plant and Equiper Assetsal Non-Current Assal Assetsde Payableser Liabilitiesrt-term Borrowingsal Current Liabilitieg-term Borrowingser Liabilitiesal Non-Current Liabreholders' Equityal Liabilities and ShHighlighte: Anadolu Efes suber to provide more ce:EBITDAcompre), depreciation and SalSAFinaProCasTraInveOthTotInveProOthTotTotTraOthShoTotLonOthTotShaTotNotordNotnatu0/6,0,21) 6,5 8) 9,7,3,4,1 ,0,9,0,0,0,9,1,9,9,5,8,3,3,59,9
f201220(1,6(6,9425912018
f201220(1,6(6,94259120183654301.151.571033446691.57RS.10 and 30.06.2009fnetlossofassociatsloss/(gain)onsaleRS.2009/6416,9195,541,2 (61,6) (24,4) (24,2) (2,8)(21,4)83,6 2009/12219,156,9126,629,3432,5676,4456,130,128,81.194,51.626,9154,2228,0382,2473,767,9541703,21.626,9n accordance with IFONS (EBI)riod Ended 30.06.20net),tax,shareoholdingactivities,pn accordance with IFONS (EBI).2010 and 31.12.200 obligations)statements prepared iER OPERATIOthe Six Months Perlincome/(expense)licable,minusgainordance with IFRS on USD)statements prepared iER OPERATIOt Items as of 30.06ordance with IFRS n USD)s in Securitiesof long-term debt and leases
)ionsolidated financial sNATIONAL B
)ionsolidated financial sNATIONAL BEEtatement Items For foreinterest(financiayinterest,andasapairment.Prepared In Acco (millioconsolidated financial sNATIONAL BEEdated Balance SheePrepared In Acco(milliooliters)ERATIONSense)FORE TAXFTER TAXParent Companyalents and Investmentssquipmentding goodwill)atessetsssetsles(including current portion ities (including lease obligationsabilitiesiabilitiesShareholders' EquiBI are obtained from cINTERolidated Income Stemeansearningsbeisation,minusminorins, reserves and impBI are obtained from cINTERighlighted ConsolidVolume (million hectNET SALES GROSS PROFITPROFIT FROM OPFinancial Income / (Ex
pLOSS)/PROFIT BEncome TaxLOSS)/PR
pLOSS)/PROFIT BEncome TaxLOSS)/PROFIT AFAttributable toMinority InterestEquity Holders of the PEBITDAash and Cash EquivaTrade Receivablesnventoriesther Current AssetsTotal Current AssetsProperty, Plant and Eqntangible Assets (inclunvestments in AssociaOther Non-Current AsTotal Non-Current ATotal AssetsTrade and Other PayabShort-term BorrowingsTotal Current LiabiliLong-term BorrowingsOther Non-Current LiaTotal Non-Current LTotal EquityTotal Liabilities and Note 2: Figures for EB Highlighted ConsNote1:EBITDAherepreciationandamorPE disposals, provisioNote 1: Figures for EBH22LIn(LAMEECTInOTPInInOTTTSTLOTT