COCA-COLA İÇECEK A.Ş. — Annual Report 2020

Feb 24, 2021

SUCCESFUL CONCLUSION TO AN UNPRECEDENTED YEAR

FY2020 Highlights

• Consolidated volume down 1.9%
• Net sales revenue per unit case growth of 22.2%
• EBITDA margin expansion of 282 bps to an all-time high EBITDA margin of 21.8%
• Earnings per share growth of 27.6%
• The highest ever free cash flow of TRY 2.0 billion

Burak Basarir, CEO of Coca-Cola Icecek, commented: "Our solid fourth-quarter performance concludes an unforgettable year. We faced the worst crisis in CCI's history, responded quickly, and recorded successful results beyond our initial expectations. I am proud of our employees' relentless drive to ensure the uninterrupted continuation of our business while taking care of our customers, suppliers, and communities.

In 2020, we delivered on our quality growth algorithm once again: net revenue grew ahead of volume, EBITDA - ahead of net revenue. We remained focused on our revenue growth initiatives and financial discipline to create value in this volatile and uncertain environment. The resilience of the Coca-Cola system was also on display during the year, enabling us to learn from each other and rely on our brand portfolio's strength.

Our core sparkling business registered 4% volume growth in 2020, driven by the 8% growth of our flagship brand, Coca-ColaTM. Turkey operations had to weather the most challenging conditions within our operating territory with the highest share of exposure to the on-premise channel. It recovered significantly in the second half and completed the year with a 7.5% year on year ("y/y") volume decline. International sales volume grew by 2.8% y/y, led by a remarkable 6% y/y growth of the sparkling category. We are particularly pleased with Pakistan's performance, where we consistently outperformed the market and gained sparkling category leadership.

We remained committed to our value generation strategy in this challenging environment. Our continuous focus on revenue growth initiatives delivered 22% net sales revenue per unit case growth.

Strict cost management discipline was visible throughout the year, resulting in a significant expansion in CCI's profitability. Consolidated EBITDA margin reached an all-time high level of 21.8% in 2020. Some of the measures we have taken, such as cuts in direct marketing expenses, will not continue in full as the operating environment normalizes. However, our lean operating model and frugal mindset in managing our costs will continue to be the norm going forward.

The pandemic environment is not over yet. As we navigate the crisis, we are continuously adapting to emerge stronger from the pandemic. We remain focused on operational improvements and financial discipline to accelerate strategies to achieve sustainable, long-term value creation.

Encouraged by our excellent execution capabilities and our brands' strength, we believe 2021 will be a year where we will continue to deliver on our quality growth algorithm. We'll continue capitalizing on our learnings and leveraging our markets' potential to advance towards our vision to be the best FMCG company across our markets while delivering quality growth.

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Key Income Statement Figures and Ratios

Consolidated (million TRY)	2020	2019	Change %	4Q20	4Q19	Change %
Volume (million uc)	1,184	1,207	(1.9%)	227	203	11.7%
Net Sales	14,391	12,008	19.8%	3,184	2,149	48.1%
Gross Profit	5,072	4,181	21.3%	1,044	763	36.7%
EBIT	2,143	1,517	41.2%	155	87	78.7%
EBIT (Exc. other)	2,196	1,601	37.1%	170	66	156.5%
EBITDA	3,137	2,279	37.7%	517	270	91.1%
EBITDA (Exc. other)	3,149	2,335	34.8%	510	250	104.0%
Profit Before Tax	1,766	1,185	49.0%	(171)	3	(n.m.)
Net Income/(Loss)	1,233	966	27.6%	(163)	1	(n.m.)
Gross Profit Margin	35.2%	34.8%		32.8%	35.5%
EBIT Margin	14.9%	12.6%		4.9%	4.0%
EBIT Margin (Exc. other)	15.3%	13.3%		5.3%	3.1%
EBITDA Margin	21.8%	19.0%		16.2%	12.6%
EBITDA Margin (Exc. other)	21.9%	19.4%		16.0%	11.6%
Net Income Margin	8.6%	8.0%		(5.1%)	0.0%
Turkey (million TRY)	2020	2019	Change %	4Q20	4Q19	Change %
Volume (million uc)	512	554	(7.5%)	106	99	7.3%
Net Sales	6,188	5,524	12.0%	1,350	1,010	33.6%
Gross Profit	2,430	2,325	4.5%	483	370	30.5%
EBIT	1,413	1,167	21.0%	68	(25)	(n.m.)
EBIT (Exc. other)	777	761	2.0%	(23)	(23)	1.9%
EBITDA	1,698	1,423	19.3%	144	45	219.6%
EBITDA (Exc. other)	1,064	1,009	5.4%	62	47	31.6%
Net Income/(Loss)	686	802	(14.4%)	2	(103)	(n.m.)
Gross Profit Margin	39.3%	42.1%		35.8%	36.6%
EBIT Margin	22.8%	21.1%		5.0%	(2.5%)
EBIT Margin (Exc. other)	12.5%	13.8%		(1.7%)	(2.2%)
EBITDA Margin	27.4%	25.8%		10.7%	4.5%
EBITDA Margin (Exc. other)	17.2%	18.3%		4.6%	4.7%
Net Income Margin	11.1%	14.5%		0.2%	(10.2%)
International (million TRY)	2020	2019	Change %	4Q20	4Q19	Change %
Volume (million uc)	672	654	2.8%	121	104	15.8%
Net Sales	8,204	6,487	26.5%	1,835	1,140	60.9%
Gross Profit	2,642	1,856	42.4%	562	394	42.6%
EBIT	1,278	709	80.2%	157	112	40.5%
EBIT (Exc. other)	1,323	769	72.1%	172	72	139.1%
EBITDA	1,988	1,217	63.4%	435	226	92.0%
EBITDA (Exc. other)	1,990	1,257	58.4%	427	186	129.5%
Net Income/(Loss)	746	412	80.9%	7	40	(83.2%)
Gross Profit Margin	32.2%	28.6%		30.6%	34.5%
EBIT Margin	15.6%	10.9%		8.6%	9.8%
EBIT Margin (Exc. other)	16.1%	11.9%		9.4%	6.3%
EBITDA Margin	24.2%	18.8%		23.7%	19.9%
EBITDA Margin (Exc. other)	24.3%	19.4%		23.3%	16.3%
Net Income Margin	9.1%	6.4%		0.4%	3.5%

As announced on April 1, 2020, The Coca-Cola Company (TCCC) and our Company reached an agreement to terminate the sales and distribution of Doğadan, the non-ready to drink (NARTD) tea in our portfolio, and therefore we treat Doğadan business as discontinued operations. Accordingly, our FY2020 financials do not include Doğadan. In order to provide a fair comparison, FY2019 financials are restated to exclude Doğadan as well. Throughout this release, all comparisons will refer to our core business, excluding NARTD tea, unless stated otherwise.

Operational Overview

Sales Volume

CCI leveraged its agility and adaptability in 2020, quickly responding to the unprecedented challenges and effectively adapting to the new operating environment.

Following a strong start to the year, our operating geography faced the impact of the COVID-19 pandemic starting from the second half of March. As soon as the pandemic began, we responded very quickly, prioritizing our people, communities, and business continuity. We optimized the SKU portfolio and benefited from our brands' diversity to capture new occasions and trends borne by this crisis. We managed the changing channel mix proactively and supported our retail trade customers utilizing our digital infrastructure and execution capabilities. These measures enabled us to contain the pandemic's negative impact, move to rapid recovery, and restore sustainable quality growth.

4Q20 showed strong volume growth of 11.7% year on year ("y/y") on a consolidated basis with all countries' positive contributions except for Tajikistan. Turkey's sales volume grew by 7.3%, while consolidated international operations increased by 15.8% y/y. Our sparkling business continued to outperform, growing by 20.2% y/y. The sparkling category's growth came on the back of 24.8% growth of brand Coca-ColaTM and double-digit growth achieved in Fanta and Sprite brands. The sparkling category grew by double digits in both Turkey and International markets. The stills category recovered significantly compared to previous quarters, recording a limited decline of 1.1% y/y cycling, a solid 14.5% growth of the last year. The 23.2% contraction in the water category is driven by our value focus, prioritizing small packs and premium extensions vs. large packs with lower profits.

In FY20, consolidated sales volume declined by 1.9% to 1,184 million unit cases ("UC"). International operations' sales volume grew by 2.8%, delivering a more resilient performance during the year. The lower exposure to the on-premise channel and a higher share of the strong sparkling category were the main reasons for international operations' strong performance. Strong execution brought us sparkling category leadership in our largest international market, Pakistan. Sales volume in Turkey was down 7.5% y/y.

Brand Coca-Cola demonstrated its importance in our consumers' lives even at such a pandemic: its sales volume increased by 7.7% y/y in FY20 with growth in all our countries without exception. The sparkling category recorded a 3.9% growth in FY20. On the other hand, the stills category contracted by 10.8% y/y in FY20 while cycling a 5.1% growth in the previous year. As a result of our value focus, the water category volume declined by 27.4% y/y in FY20.

Volume (mn UC)	2019	2020	2020/2019 Δ	4Q19	4Q20	4Q20/4Q19 Δ
Consolidated	1,207	1,184	(1.9%)	203	227	11.7%
Turkey	554	512	(7.5%)	99	106	7.3%
International	654	672	2.8%	104	121	15.8%

Turkey

Turkey operations recovered significantly in 4Q20 compared to previous quarters while growing volume by 7.3% y/y. Activation of multi-packs for at-home occasions through strong collaborations played an important role in growing volume. Our newly launched digital sales tools and wellmanaged consumer promotions through new digital platforms also supported our strong performance. Our innovations in sparkling and stills categories and good weather were other positive factors, offsetting the negative impact of the on-premise channel's re-closure at the end of November.

Cycling 3.2% growth a year ago, Turkey's total sales volume contracted by 7.5% in FY20 y/y to 512 million UC.

The sparkling category had an outstanding performance in 4Q20 and grew by 18.1% y/y despite cycling a robust growth of 15.8% a year ago. Coca-ColaTM's remarkable volume growth of 24.3% in 4Q20 was the main driver of the sparkling category growth. Fanta and Schweppes also positively contributed. The userbase of Coca-ColaTM stayed at the high season level in Q4 due to increased consumer communication, promotion, and in-store activation support. While cycling a strong growth of 3.8% a year ago, the sparkling category remained flat in FY20 on the back of the last two quarters' good performance.

The stills category improved significantly in 4Q20 compared to the previous quarter and grew by 1.4% y/y despite cycling 12.9% growth. The main drivers were iced tea with 5.1% y/y volume growth and the recovery in a juice segment compared to earlier quarters. Due to softer performance in the second and third quarters, the stills category contracted by 13.3% y/y in FY20. The water category was down by 22.8% y/y in 4Q20, bringing the yearly decline to 28.3%. The contraction in the water category mainly stemmed from our value-based approach prioritizing profitable packs.

Our efforts to increase the share of immediate consumption packages in all categories mitigated the negative effect arising from the on-premise channel's closure to some extent. Therefore, IC share in FY20 decreased to 25% from 33% in FY19.

International

International operations maintained its positive trend with growth in each month throughout the last quarter of the year. Consolidated sales volumes of international operations increased by 15.8% y/y in 4Q20, with all countries contributing to growth except Tajikistan.

In FY20, the consolidated sales volume of international operations grew by 2.8% y/y to 672 million UC, led by the sparkling category's 6.5% y/y growth.

Pakistan operations continued to deliver substantial recovery during 4Q20. Sales volume was up by 32.1% y/y in 4Q20, bringing yearly growth to 5.2% in FY20. This growth was built on strategic consistency and operational excellence. CCI continued its focus on at-home consumption by successfully executing consumer promotions, focused regional plans, and consistently improving execution. In FY20, the sparkling category grew by 5.4% y/y, supported by 11.4% y/y growth in Coca-ColaTM. While in 4Q20, the sparkling category grew by 32.9% y/y with double-digit growth

across Coca-ColaTM, Sprite & Fanta. The water category recovered significantly in 4Q20, growing 20.1%, bringing full-year growth to 6.2%. CCI Pakistan consistently outperformed the market and achieved FY20 sparkling share leadership in 4Q20. While Coca-ColaTM continues to be the leader in Colas, Sprite also performed well.

In Iraq, total sales volume grew by 1.6% y/y in 4Q20, supported by the double digits growth of the sparkling category. Coca-ColaTM continued to be the most resilient, increasing by 7.2% y/y in the same period. In FY20, despite the solid growth of 6.9% in the sparkling category, a 37.4% contraction in the water category resulted in a 4.1% total volume decline in Iraq. Jordan operations continued their excellent performance in 4Q20 and recorded a total growth of 24.7% in 4Q20 and 16.0% in FY20, primarily driven by sparkling growth.

Kazakhstan's 4Q20 sales volume grew by 1.6%, cycling 16.2% growth in 4Q19. FY20 sales volume increased 0.4% y/y despite cycling strong growth of 13.9% a year ago. Coca-ColaTM and Schweppes led the 5.9% growth in the sparkling category in FY20. The stills category contracted by 7.9% y/y in FY20. Cycling 27.5% growth in FY19, the water category declined by 26.0% y/y in FY2020.

Azerbaijan's total sales volume in 4Q20 increased by 3.0%. Cycling 20.5% growth in FY19, total sales volume in Azerbaijan decreased by 1.2% y/y. As in all countries, the sparkling category was the most resilient in Azerbaijan in FY20, growing 5.9% driven by the strong performance of Coca-ColaTM.

Turkmenistan operations positively contributed to total volume, having started limited production in the third quarter. Without Turkmenistan, the volume growth of our international operations in FY20 would have been 2.4%.

Financial Overview

Net sales revenue ("NSR") grew by 48.1% on a consolidated basis in 4Q20. Currency conversion had some positive impact. However, NSR on FX neutral basis has also strongly increased by 27.4%. Price adjustments, disciplined revenue growth management initiatives and higher share of sparkling beverages resulted in strong FX neutral NSR/UC growth of 14.1%, despite negative package and country mix. In FY20, NSR grew by 19.8% and reached TRY 14,391.0 million.

Turkey's NSR per unit case increased by 24.5% in 4Q20 y/y. The growing share of the sparkling category, price adjustments and revenue growth management initiatives consistently delivered per unit case growth through the year. Accordingly, NSR grew by 12.0% in FY20 and reached TRY 6,188.4 million with a per unit case NSR growth of 21.1%.

In the international operations, NSR grew by 21.8% on FX neutral basis in 4Q20. NSR/uc growth in all major operations resulted from commitment to revenue growth initiatives. In FY20, international NSR grew by 26.5% and reached TL 8,204.0 million. FX neutral NSR growth was 8.8% in the year.

		Net Sales Revenue (TRY m)		NSR per UC (TRY)
	4Q20	YoY Change	4Q20	YoY Change
Turkey	1,350	33.6%	12.74	24.5%
International	1,835	60.9%	15.18	38.9%
International (FX Neutral)(1)	1,389	21.8%	11.50	5.2%
Consolidated	3,184	48.1%	14.04	32.6%
Consolidated (FX Neutral)(1)	2,739	27.4%	12.08	14.1%

(1) FX-Neutral: Using constant FX rates when converting country P&Ls to TRY

Gross margin was down by 273 bps to 32.8% in 4Q20 on a reported basis. The reported gross profit was impacted by the change in spare parts' useful life from 20 years to 10 years, the negative packaging and country mix, and discontinuation of cash designation methodology since 01.01.2020 (for details on cash designation methodology, please refer to our FY2019 results announcement). Excluding the impact of cash designation, the gross profit margin on a reported basis was down only slightly by 50 bps. The TRY 121.5 million non-cash cumulative effects reflecting the change of spare parts' useful life was fully incurred in 4Q20. If this non-cash impact is excluded, gross margin was up by 331 bps. FY20 gross margin increased by 43 bps to 35.2%. Excluding the effect of cash designation, margin expansion would have been 250 bps in FY20. If the spare parts amortization is excluded, margin expansion would have been 335 bps.

In Turkey, the gross margin declined by 85 bps to 35.8% in 4Q20. The gross margin would have expanded by 390 bps on a comparable basis when the positive contribution of cash designation in 4Q19 was excluded. Higher NSR per unit case, limited or no increase in certain raw materials, and cost efficiencies offset unfavorable package mix and change in spare parts' amortization period. Excluding the impact of cash designation and the impact of the shortening of spare parts' useful life, Turkey's 4Q20 gross margin increased by 501 bps. FY20 gross margin of Turkey declined by 282 bps to 39.3%. Without the cash designation impact, gross margin would have increased by 169 bps.

In our international operations, the gross margin in 4Q was mainly impacted by the shortening of spare parts' useful life and declined by 392 bps to 30.6%. Excluding this non-cash impact, gross margin expanded by 188 bps y/y. Cost efficiencies and higher sales prices resulted in 360 bps margin expansion to 32.2% in FY20 despite challenging conditions in our markets.

EBIT margin increased by 83 bps to 4.9% in 4Q20. Excluding the one-off non-cash impact of spare parts amortization adjustment, normalized margin expansion was 465 bps. Although the degree has decreased compared to previous quarters, the continuation of cost-cutting and operating with a leaner SKU portfolio resulted in an expansion in EBIT margin. EBIT margin expansion would have been 306 bps without the impact of cash designation. In FY20, the EBIT margin increase was 226 bps. Excluding cash designation and spare parts impact margin increase was 517 bps.

EBITDA margin increased by 365 bps to 16.2% in 4Q20, while the expansion would have been 588 bps, excluding the impact of cash designation from 4Q19. In this challenging period, quality growth momentum was maintained with our commitment to revenue growth management and disciplined cost control. Turkey operation's EBITDA margin, excluding the impact of other

income/(expense), was flat on a reported basis while increased by 467 bps excluding the cash designation impact. International operation's EBITDA margin, excluding the effect of other income/(expense), increased by 696 bps to 23.3%. In FY20, consolidated EBITDA margin expansion was 282 bps to 21.8%, an all-time high margin for CCI.

Net financial expense, including lease payables related to TFRS 16, was TRY (179) million in 4Q20 compared to TRY (85) million in 4Q19. An average of USD 101 million long position on the balance sheet resulted in FX loss on the back of 6% appreciation of TRY against USD by 31.12.2020 vs. 30.09.2020. Devaluations in Iraq and Tajikistan also impacted the hard currency borrowings in those countries' balance sheets. Finally, compared to 4Q19, a higher share of local currency borrowings resulted in higher financial expense. In FY20, the net financial expense was TRY (289) million compared to TRY (335) million in FY19. The lower net financial expense in FY20 despite the 24% devaluation of TRY against USD (devaluation in 2019 was 13%) was due to the successful decrease of FX short position.

Financial Income / (Expense) Breakdown (TRY mio)	4Q19	4Q20	2019	2020
Interest income	40	66	146	149
Interest expense (-)	(74)	(91)	(317)	(371)
Other financial FX gain / (loss)	82	(177)	134	424
Gain on Derivative Transactions	0	5	0	20
Interest Expense&ıncome Net -Derivative Transactions	2	(1)	2	(46)
Realized FX gain / (loss) -Borrowings	0	0	(120)	(92)
Unrealized FX gain / (loss) -Borrowings	(136)	20	(180)	(373)
Financial Income / (Expense) Net	(85)	(179)	(335)	(289)

Non-controlling interest (minority interest) was TRY 5.4 million in 4Q20 compared to TRY 11.8 million in 4Q19.

Net profit was TRY 1,232.7 million in FY20 vs. TRY 965.8 million in FY19. An increase in net income was the result of strong operating profitability and lowered net financial expenses. In 4Q20, TRY (162.9) million net loss was recorded, mainly on the back of TRY 122 million non-cash spare parts amortization adjustment and TRY 127 million non-cash Iraq put option revaluation expense.

Free cash flow was TRY 1,987 million in FY20 vs. TRY 1,081 million in FY19. Besides solid profitability and lower capital expenditure in line with our prudent spending approach during the pandemic, exceptionally tight working capital management also resulted in the solid free cash flow generation. As a percentage of net sales revenue, net working capital was negative at 0.3% in FY20, driven mainly by a solid improvement in Turkey and Pakistan. The net working capital was also positively impacted by Iraq's classification put option as short-term liability vs. long term liability in previous periods. Excluding this impact, the net working capital to NSR ratio was 1.9% in FY20 vs. 4.1% in FY19.

CapEx was TRY 666 million in FY20, representing 4.6% of NSR. CapEx/NSR ratio was 175 bps lower than FY19 due to freezing of all uncommitted capex as guided at the start of the pandemic (other than investments in digitization of CCI and health and safety expenditure). 45% of the total

capital expenditure was related to Turkey operation, while 55% was related to international operations.

The consolidated debt was USD 839 million by 31.12.2020, with a lower share of hard currency borrowings, compared to USD 924 million at 31.12.2019. Consolidated cash was USD 638 million, bringing consolidated net debt to USD 201 million. Our Net Debt/EBITDA ratio came down to 0.47x by 31.12.2020 from 1.12x on 31.12.2019 due to our strong operating profitability, strict financial discipline, and free cash flow generation.

Financial Leverage Ratios	2019	2020
Net Debt / EBITDA	1.12	0.47
Debt Ratio (Total Fin. Debt / Total Assets)	34.4%	32.2%
Total Fin. Debt-to-Equity Ratio	75%	71%

Including lease payables related to TFRS 16

• As of 31.12.2020, including the USD 150 million of a hedging transaction, 59% of our consolidated financial debt was in USD (68% as of YE19), 14% in EUR, 19% in TRY, and the remaining 8% in other currencies.
• The average duration of the consolidated debt portfolio was 2.78 years, and the maturity profile was as follows:

Maturity Date	2021	2022	2023	2024
% of total debt	21%	4%	19%	56%

Accounting Principles

The consolidated financial statements and disclosures have been prepared in accordance with the communiqué numbered II-14,1 "Communiqué on the Principles of Financial Reporting in Capital Markets. In accordance with article 5 of the CMB Accounting Standards, companies should apply Turkish Accounting Standards / Turkish Financial Reporting Standards ("TAS" / "TFRS") and interpretations regarding these standards as adopted by the Public Oversight Accounting and Auditing Standards Authority ("POA"). As of December 31, 2020, the list of CCI's subsidiaries and joint ventures are as follows:

Subsidiaries and Joint Ventures	Country	ConsolidationMethod
Coca-Cola Satış ve Dağıtım A.Ş.	Turkey	FullConsolidation
Mahmudiye Kaynak Suyu Limited Şirketi	Turkey	FullConsolidation
JVCoca-Cola Almaty Bottlers LLP	Kazakhstan	FullConsolidation
Azerbaijan Coca-Cola Bottlers LLC	Azerbaijan	FullConsolidation
Coca-Cola Bishkek Bottlers Closed J. S. Co.	Kyrgyzstan	FullConsolidation
CCI International Holland BV.	Holland	FullConsolidation
Tonus Turkish-Kazakh Joint Venture LLP	Kazakhstan	FullConsolidation
The Coca-Cola Bottling Company of Jordan Ltd.	Jordan	FullConsolidation
Turkmenistan Coca-Cola Bottlers	Turkmenistan	FullConsolidation
Sardkarfor Beverage Industry/Ltd	Iraq	FullConsolidation
Waha Beverages BV.	Holland	FullConsolidation
Coca-Cola Beverages Tajikistan LLC	Tajikistan	FullConsolidation
Al Waha for Soft Drinks, Juices, Min.Water, Plastics, and PlasticCaps Prod. LLC	Iraq	FullConsolidation
Coca-Cola Beverages Pakistan Ltd.	Pakistan	FullConsolidation
Syrian Soft Drink Sales and Distribution LLC	Syria	Equity Method

EBITDA Reconciliation

The Company's "Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA)" definition and calculation are defined as; "Profit/(loss) from operations" plus relevant non-cash expenses including depreciation and amortization, provision for employee benefits like retirement and vacation pay (provision for management bonus not included) and other non-cash expenses such as negative goodwill and value increase due to change in scope of consolidation. As of December 31, 2019, and 2020, reconciliation of EBITDA to profit / (loss) from operations is explained in the following table:

EBITDA (TRY million)	4Q19	4Q20	2019	2020
Profit / (loss) from operations	87	155	1,517	2,143
Depreciation and amortization	168	317	645	852
Provision for employee benefits	(2)	5	40	35
Foreign exchange gain/(loss) under other operating income/(expense)	(0)	22	27	41
Right of use asset amortization	18	18	49	67
EBITDA	270	517	2,279	3,137

Totals may not add up due to rounding differences

Foreign Currency Translations

Transactions in foreign currencies are recorded at the rate ruling at the date of the transaction. All differences are recorded in the consolidated income statement of the relevant period, as foreign currency loss or gain. Foreign currency translation rates announced by the Central Bank of the Republic of Turkey used by the Group's subsidiaries in Turkey. USD amounts presented in the balance sheet are translated into TRY with the official TRY exchange rate for purchases of USD on December 31, 2020, USD 1.00 (full) = TRY 7.3405 (December 31, 2019; USD 1.00 (full) = TRY 5.9402). Furthermore, USD amounts in the income statement have been translated into TRY, at the average TRY exchange rate for purchases of USD for the year ended December 30, 2020, is USD 1.00 (full) = TRY 7.0034 (January 1 December 31, 2019; USD 1.00 (full) = TRY 5.6712).

Exchange Rates	4Q19	4Q20	2019	2020
Average USD/TRY	5.7853	7.8616	5.6712	7.0034
Endof Period USD/TRY	5.9402	7.3405	5.9402	7.3405

The assets and liabilities of subsidiaries and joint ventures operating in foreign countries are translated at the rate of exchange ruling at the balance sheet date, and the income statements of foreign subsidiaries and joint ventures are translated at average exchange rates. Differences that occur by the usage of closing and average exchange rates are followed under currency translation differences classified under equity.

2021 Guidance

The 2021 business outlook information provided below includes best estimate forward-looking financial measures, which management uses in measuring performance. The business outlook of the Company is subject to the risks which are stated in the annual report and financial reports.

• CCI adapted its business model to new operating environment and is looking beyond pandemic for future growth and value creation for our stakeholders in everything it does.
• While we believe the worst is behind us, the uncertainty around the path and duration of the pandemic is still there.
• On top of it, the long-term consequences for the economies, communities, and our business are becoming more pronounced. With all these uncertainties and risks in mind, we made our business plans with a growth mindset, sticking firmly to our quality growth algorithm, maintaining disciplined financial management, and making our frugal mindset the norm going forward.
• We expect to deliver sales volume growth in the range of 4% to 6% on a consolidated basis leveraging the vast potential of our markets and our diverse, balanced portfolio while cycling the 2020 base. The growth in Turkey operations is expected to be low single digits, while the growth expectation for international operations is high single digits.
• With our focus on revenue growth management, we expect consolidated fx-neutral net sales revenue growth to be in the high teens.
• The strong margin expansion achieved in 2020 was to a certain extent due to one off factors like cutting of DME expenses, but also as a result of more sustainable measures such as leaner SKU portfolio and strict financial management. With growth in volumes, higher net sales revenue per unit case and our frugal mindset, we expect EBITDA margin to be flattish in 2021 vs 2020.
• After cutting all uncommitted capex in 2020 except for digital investments and investment in revenue growth management initiatives and health and safety, we expect capital expenditure to return to its normal pace in 2021, staying at 6-8% of consolidated net sales revenue.
• Cycling an exceptionally low net working capital to sales ratio, we expect some moderation to lowsingle digits, yet our commitment to delivering strong FCF continues.

CCI Consolidated Income Statement

Audited

	1 January -		31 December	1 October -		31 December
(TRY million)	2019	2020	Change (%)	2019	2020	Change (%)
Sales Volume (UC millions)	1,207	1,184	(1.9%)	203	227	11.7%
Revenue		12,008 14,391	19.8%	2,149	3,184	48.1%
Cost of Sales	(7,827)	(9,319)	19.1%	(1,386)	(2,140)	54.4%
Gross Profit from Operations	4,181	5,072	21.3%	763	1,044	36.7%
Distribution, Selling and Marketing Expenses	(2,053)	(2,213)	7.8%	(582)	(683)	17.4%
General and Administrative Expenses	(526)	(663)	26.0%	(115)	(191)	65.6%
Other Operating Income	128	251	96.7%	75	35	(52.7%)
Other Operating Expense	(211)	(303)	43.7%	(54)	(50)	(7.7%)
Profit/(Loss) from Operations	1,517	2,143	41.2%	87	155	78.7%
Gain/(Loss) From Investing Activities	3	(85)	(n.m.)	2	(148)	(n.m.)
Gain/(Loss) from Associates	(0)	(3)	(n.m.)	(0)	(0)	(47.2%)
Profit/(Loss) Before FinancialIncome/(Expense)	1,520	2,055	35.2%	89	7	(91.8%)
Financial Income	436	1,056	142.0%	125	223	79.2%
Financial Expenses	(771)	(1,345)	74.4%	(210)	(402)	91.6%
Profit/(Loss) Before Tax	1,185	1,766	49.0%	3	(171)	(n.m.)
Deferred Tax Income/(Expense)	(4)	(50)	(n.m.)	(28)	(150)	n.m.
Current Period Tax Income/(Expense)	(242)	(398)	64.7%	15	153	920%
Net Income/(Loss) Before Minority	939	1,318	40.3%	(11)	(169)	n.m.
Minority Interest	24	(82)	(n.m.)	12	5	(54.5%)
Profit (Loss) from Continuing Operations	963	1,237	(28.4%)	1	(163)	n.m.
Profit (Loss) from Discontinued Operations	3	(4)	231.8%	(1)	0	171.8%
Net Income	966	1,233	27.6%	1	(163)	(n.m.)
EBITDA	2,279	3,137	37.7%	270	517	91.1%

Totals may not add up due to rounding differences

Turkey Income Statement

Audited

	1 January -		31 December	1 October -		31 December
(TRY million)	2019	2020	Change (%)	2019	2020	Change (%)
Sales Volume (UC millions)	554	512	(7.5%)	99	106	7.3%
Revenue	5,524	6,188	12.0%		1,010 1,350	33.6%
Costof Sales	(3,199)	(3,759)	17.5%	(640)	(867)	35.4%
Gross Profit from Operations	2,325	2,430	4.5%	370	483	30.5%
Distribution, Selling and Marketing Expenses (1,242)		(1,248)	0.5%	(322)	(393)	22.1%
General and Administrative Expenses	(321)	(405)	26.1%	(70)	(112)	60.2%
Other Operating Income	456	749	64.3%	23	88	278.5%
Other Operating Expense	(50)	(112)	126.3%	(26)	3	(110.0%)
Profit/(Loss) from Operations	1,167	1,413	21.0%	(25)	68	(369.7%)
Gain/(Loss) From Investing Activities	8	(62)	(n.m.%)	(7)	(135)	n.m.
Gain/(Loss) from Associates	0	0	n/a	0	0	n/a
Profit/(Loss) Before FinancialIncome/(Expense)	1,175	1,351	14.9%	(33)	(66)	103.0%
Financial Income	412	827	100.8%	122	111	(9.0%)
Financial Expenses	(781)	(1,385)	77.4%	(236)	(47)	(80.3%)
Profit/(Loss) Before Tax	806	792	(1.7%)	(147)	(2)	(98.8%)
Deferred Tax Income/(Expense)	92	15	(83.5%)	(22)	(38)	74.7%
Current Period Tax Income/(Expense)	(98)	(116)	18.6%	66	42	(36.6%)
Net Income/(Loss) Before Minority	800	691	(13.6%)	(103)	2	(101.7%)
Minority Interest	0	0	n/a	0	0	n/a
Profit (Loss) from Continuing Operations	800	691	(13.6%)	(103)	2	(101.7%)
Profit (Loss) from DiscontinuedOperations	2	(5)	(n.m.)	(1)	0	(n.m.)
Net Income	802	686	(14.4%)	(103)	2	(102.1%)
EBITDA	1,423	1,698	19.3%	45	144	219.6%

Totals may not add up due to rounding differences

International Income Statement

Audited

		1 January -31 December		1 October -		31 December
(TRY million)	2019	2020	Change(%)	2019	2020	Change(%)
Sales Volume (UC millions)	654	672	2.8%	104	121	15.8%
Revenue	6,487	8,204	26.5%	1,140	1,835	60.9%
Cost of Sales	(4,632)	(5,562)	20.1%	(746)	(1,273)	70.5%
Gross Profit from Operations	1,856	2,642	42.4%	394	562	42.6%
Distribution, Selling and Marketing Expenses	(812)	(966)	19.0%	(260)	(291)	11.6%
General and Administrative Expenses	(275)	(353)	28.4%	(61)	(99)	61.2%
Other Operating Income	102	146	43.1%	68	38	(44.0%)
OtherOperating Expense	(162)	(192)	18.5%	(28)	(53)	87.8%
Profit/(Loss) from Operations	709	1,278	80.2%	112	157	40.5%
Gain/(Loss) From Investing Activities	(5)	(22)	n.m.	(5)	(14)	159.8%
Gain/(Loss) from Associates	(0)	(3)	(n.m.)	(0)	(0)	(47.2%)
Profit/(Loss) Before FinancialIncome/(Expense)	704	1,252	77.8%	107	143	34.6%
Financial Income	44	252	471.3%	8	118	n.m.
Financial Expenses	(184)	(429)	133.5%	(41)	(212)	418.3%
Profit/(Loss) Before Tax	564	1,074	90.4%	73	49	(32.6%)
Deferred Tax Income/(Expense)	(54)	(1)	(97.5%)	(21)	16	(176.0%)
Current Period Tax Expense	(122)	(247)	102.2%	(24)	(64)	171.0%
Net Income/(Loss) Before Minority	388	826	113.0%	29	1	(95.4%)
Minority Interest	24	(82)	(n.m.)	11	5	(51.1%)
Profit (Loss) from Continuing Operations	411	745	81.0%	40	7	(83.2%)
Profit (Loss) from Discontinued Operations	1	1	33.3%	0	0	(59.8%)
Net Income	412	746	80.9%	40	7	(83.2%)
EBITDA	1,217	1,988	63.4%	226	435	92.0%

CCI Consolidated Balance Sheet

(TRY million)	Audited	Audited
	December 31 2019	December 31 2020
Current Assets	5,465	7,664
Cash and Cash Equivalents	2,823	4,661
Investments in Securities	110	23
Derivative Financial Instruments	3	36
Trade Receivables	700	739
Due from related parties	210	296
Other Receivables	27	34
Inventories	872	1,041
Prepaid Expenses	231	303
Tax Related Current Assets	208	249
Other Current Assets	283	282
Non-Current Assets	10,495	11,484
Derivative Financial Instruments	0	7
Other Receivables	39	47
Right of Use Asset	194	194
Property, Plant and Equipment	6,899	7,344
Intangible Assets	2,174	2,464
Goodwill	844	983
Prepaid Expenses	243	262
Deferred Tax Asset	101	183
Total Assets	15,960	19,147
Current Liabilities	3,536	4,323
Short-term Borrowings	445	984
Current Portion of Long-term Borrowings	996	259
Financial lease payables	52	57
Trade Payables	1,044	1,358
Due to Related Parties	437	480
Payables Related to Employee Benefits	45	50
Other Payables	373	518
Provision for Corporate Tax	20	62
Provision for Employee Benefits	59	79
Other Current Liabilities	61	418
Derivative Financial Instruments	4	58
Non-Current Liabilities	5,054	6,088
Financial lease payables	173	179
Long-term Borrowings	3,825	4,682
Trade Payables & Due to Related Parties	66	49
Provision for Employee Benefits	118	147
Deferred Tax Liability	662	814
Other Non-Current Liabilities	209	4
DerivativeFinancial Instruments	0	213
Equity of the Parent	6,515	7,662
Minority Interest	854	1,074
Total Liabilities	15,960	19,147

CCI Consolidated Cash Flow

	Audited
(TRY million)	Period-End
	December 312019	December 312020
Cash Flow from Operating Activities
IBT Adjusted for Non-cash items	2,344	3,244
Change in Tax Assets and Liabilities	(274)	(338)
Employee Termination Benefits, Vacation Pay, Management Bonuspayments	(85)	(112)
Operating Cash Flow	1,986	2,794
Change in Operating Assets & Liabilities	47	112
Net Cash Provided by Operating Activities	2,032	2,906
Purchase of Property, Plant & Equipment	(766)	(666)
Other Net Cash Provided by/(Used in) Investing Activities	(64)	110
Interest Paid	(299)	(343)
Interest Received	146	149
Change in ST & LT Loans	(185)	(398)
Dividends paid (including non-controlling interest)	(300)	(272)
Cash Flow Hedge Reserve	(154)	21
Finance Lease Payables	(32)	(59)
Net Cash Provided by/(Used in) Financing Activities	(823)	(902)
Currency Translation Differences	154	390
Net Change in Cash & Cash Equivalents	533	1,838
Cash & Cash Equivalents at the beginning of the period	2,290	2,823
Cash & Cash Equivalents at the end of the period	2,823	4,661
Free Cash Flow	1,081	1,987

Enquiries

Investor Contact:

Çiçek Uşaklıgil Özgüneş; Investor Relations and Treasury Director

Tel: +90 216 528 4002

E-mail: cicek.ozgunes@cci.com.tr

Doruk Sazer; IR Manager

Tel: +90 216 528 4276

E-mail: doruk.sazer@cci.com.tr

Öktem Söylemez; IR Executive

Tel: +90 216 528 4618

E-mail: oktem.soylemez@cci.com.tr

Media Contact:

Nazlı İplikçioğlu; Corporate Communications Manager

Tel: +90 216 528 4209

E-mail: nazli.iplikcioglu@cci.com.tr

Elvan Salman; Corporate Communications Executive

Tel: +90 216 528 44457

E-mail: elvan.salman@cci.com.tr

Company Profile

CCI is a multinational beverage company which operates in Turkey, Pakistan, Kazakhstan, Azerbaijan, Kyrgyzstan, Turkmenistan, Jordan, Iraq, Syria and Tajikistan. As one of the key bottlers of the Coca-Cola system, CCI produces, distributes and sells sparkling and still beverages of The Coca-Cola Company.

CCI employs close to 8500 people and has a total of 26 plants in 10 countries, offering a wide range of beverages to a consumer base of 400 million people. In addition to sparkling beverages, the product portfolio includes juices, waters, sports and energy drinks, teas and iced teas.

CCI's shares are traded on the Istanbul Stock Exchange (BIST) under the symbol "CCOLA.IS", and Eurobond is traded in the Irish Stock Exchange, under the symbol "CCOLAT":

Reuters: CCOLA.IS

Bloomberg: CCOLA.TI

Eurobond: CCOLAT

Special Note Regarding Forward-Looking Statements

17 PUBLIC This document contains 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 and currencies in CCI's other markets; the level of inflation in Turkey and CCI's other markets; 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 the date of this press release and CCI has no obligation to update those statements to reflect changes that may occur after that date.