Quarterly Report • Nov 4, 2024
Quarterly Report
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• Sales volume: -9.2%
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3Q24 Results Webcast;
• EBIT margin: 19.5%, - 243bps y/y
th November live event!
• Net profit of TL 4.4billion
In 3Q24, while persistent high inflation and the spill-over of the on-going conflict in the Middle-East have put a dent on consumer confidence in our key operating regions, we have strengthened the fundamentals of our business. We have delivered 36.7 billion TL NSR in 3Q24 and \$2.70 NSR/uc (excluding TAS 29) – marking the highest NSR/uc generation in the last decade. We have remained focused on maintaining affordable price points and creating quality revenue via accelerating our mix of small-packages, stills portfolio, traditional trade and on-premise channels. In addition to activating all levers of sustainable revenue growth, our proactive cost management initiatives resulted in 129 bps y/y gross profit margin growth and 5.2 billion TL net profit in 3Q24.
In 3Q24, we saw a 9.2% y/y decline in consolidated sales volumes, totaling 438 million unit cases. Despite this decline, we continued growing in smaller packages, in higher-value channels and categories, all in line with our long-term strategy. The share of immediate consumption ("IC") packages rose by 307 bps y/y to 29.4%, building on a 216 y/y increase in 3Q23. Additionally, the traditional channel's share grew by 46 bps y/y in 3Q24, following a 79 bps rise in 3Q23. Likewise, we continued to diversify our portfolio with the stills category reaching 9.6% of our total volume vs 8.2% a year ago.
The cumulative impact of years of inflation combined with the spill-over from the conflict in the Middle-East have negatively impacted our performance in Türkiye and Pakistan, leading to volume declines of 12.2% and 22.9%, respectively. However, we saw a 1.3% y/y volume growth in other international markets, driven by strong performance in Iraq and Azerbaijan, along with a recovery in Kazakhstan. Our relentless focus on execution has resulted in year-to-date market share expansion and continued progress toward our longterm strategic aspiration. Consequently, Türkiye improved market share by 3.4 pps in sparkling from December 2023 to September 2024 and Pakistan achieved a 365 bps y/y increase in IC share.
Mindful of prolonged macroeconomic challenges, stronger-than-anticipated reduction in purchasing power in our certain regions, and the on-going conflict in the Middle-East, we are revising our full year sales volume guidance from "flat-to-low-single-digit growth" to "low-to-mid-single-digit volume decline". As a result, we are adjusting our FX-neutral NSR growth guidance from "low 30s % growth" to "high 10s to low 20s % growth." However, we are maintaining our EBIT margin guidance at "slight decline to flat compared to last year," supported by timely hedging and our commitment to strict opex management.
Last but not the least, we continued to make progress in ESG towards our 2030 Pledges. CCI received the best ESG program award from Extel and last quarter, we started operating with 100% renewable energy in two of our plants in Türkiye. The past quarter is a reminder of the volatile nature of our operating countries, yet CCI has once again stepped up to the challenge to focus on the fundamentals of our business and strengthen our competitive edge in order to capture the significant long-term growth and value creation opportunity of our low-per capita markets.
| Consolidated (million TL) | 3Q24 | 3Q23 | Change % | 9M24 | 9M23 | Change % |
|---|---|---|---|---|---|---|
| Volume (million UC) | 438 | 482 | -9.2% | 1,231 | 1,283 | -4.1% |
| Net Sales | 36,711 | 40,477 | -9.3% | 108,727 | 114,529 | -5.1% |
| Gross Profit | 13,366 | 14,215 | -6.0% | 39,251 | 38,064 | 3.1% |
| EBIT | 6,445 | 7,504 | -14.1% | 17,748 | 18,853 | -5.9% |
| EBIT (Exc. other) | 6,087 | 7,505 | -18.9% | 17,207 | 18,396 | -6.5% |
| EBITDA | 7,845 | 8,609 | -8.9% | 22,176 | 22,468 | -1.3% |
| EBITDA (Exc. other) | 7,427 | 8,591 | -13.5% | 21,560 | 22,451 | -4.0% |
| Profit Before Tax | 6,275 | 17,186 | -63.5% | 19,066 | 30,495 | -37.5% |
| Net Income/(Loss) | 5,173 | 13,387 | -61.4% | 14,270 | 22,044 | -35.3% |
| Gross Profit Margin | 36.4% | 35.1% | 36.1% | 33.2% | ||
| EBIT Margin | 17.6% | 18.5% | 16.3% | 16.5% | ||
| EBIT Margin (Exc. other) | 16.6% | 18.5% | 15.8% | 16.1% | ||
| EBITDA Margin | 21.4% | 21.3% | 20.4% | 19.6% | ||
| EBITDA Margin (Exc. other) | 20.2% | 21.2% | 19.8% | 19.6% | ||
| Net Income Margin | 14.1% | 33.1% | 13.1% | 19.2% | ||
| Türkiye (million TL) | 3Q24 | 3Q23 | Change % | 9M24 | 9M23 | Change % |
| Volume (million UC) | 176 | 201 | -12.2% | 464 | 479 | -3.2% |
| Net Sales | 18,446 | 22,566 | -18.3% | 48,186 | 52,389 | -8.0% |
| Gross Profit | 7,596 | 8,051 | -5.7% | 18,965 | 16,344 | 16.0% |
| EBIT | 7,693 | 6,963 | 10.5% | 14,267 | 7,273 | 96.1% |
| EBIT (Exc. other) | 2,788 | 3,319 | -16.0% | 5,306 | 4,327 | 22.6% |
| EBITDA | 8,438 | 7,584 | 11.3% | 16,320 | 9,140 | 78.5% |
| EBITDA (Exc. other) | 3,433 | 3,855 | -10.9% | 7,308 | 6,240 | 17.1% |
| Net Income/(Loss) | 6,796 | 12,856 | -47.1% | 12,068 | 6,248 | 93.2% |
| Gross Profit Margin | 41.2% | 35.7% | 39.4% | 31.2% | ||
| EBIT Margin | 41.7% | 30.9% | 29.6% | 13.9% | ||
| EBIT Margin (Exc. other) | 15.1% | 14.7% | 11.0% | 8.3% | ||
| EBITDA Margin | 45.7% | 33.6% | 33.9% | 17.4% | ||
| EBITDA Margin (Exc. other) | 18.6% | 17.1% | 15.2% | 11.9% | ||
| Net Income Margin | 36.8% | 57.0% | 25.0% | 11.9% | ||
| International (million TL) | 3Q24 | 3Q23 | Change % | 9M24 | 9M23 | Change % |
| Volume (million UC) | 262 | 282 | -7.1% | 767 | 804 | -4.6% |
| Net Sales | 18,342 | 17,936 | 2.3% | 60,726 | 62,202 | -2.4% |
| Gross Profit | 5,844 | 6,191 | -5.6% | 20,443 | 21,777 | -6.1% |
| EBIT | 3,319 | 3,040 | 9.2% | 11,121 | 20,496 | -45.7% |
| EBIT (Exc. other) | 3,095 | 3,978 | -22.2% | 11,015 | 13,301 | -17.2% |
| EBITDA | 4,142 | 3,608 | 14.8% | 13,823 | 22,500 | -38.6% |
| EBITDA (Exc. other) | 3,790 | 4,528 | -16.3% | 13,367 | 15,443 | -13.4% |
| Net Income/(Loss) | 2,285 | 2,073 | 10.2% | 7,475 | 16,736 | -55.3% |
| Gross Profit Margin | 31.9% | 34.5% | 33.7% | 35.0% | ||
| EBIT Margin | 18.1% | 16.9% | 18.3% | 33.0% | ||
| EBIT Margin (Exc. other) | 16.9% | 22.2% | 18.1% | 21.4% | ||
| EBITDA Margin | 22.6% | 20.1% | 22.8% | 36.2% | ||
| EBITDA Margin (Exc. other) | 20.7% | 25.2% | 22.0% | 24.8% | ||
| Net Income Margin | 12.5% | 11.6% | 12.3% | 26.9% |
Acquisition of 100% in Coca-Cola Bangladesh Beverages Limited ("CCBB") was completed on February 20th, 2024, and accordingly CCBB financial results are consolidated in our financials as of 1 March 2024. Therefore, all operational performance metrics presented in this release are on a reported basis (including CCBB), except indicated otherwise. Unit case data is not within the scope of independent audit.
In 3Q24, in our key regions, consumers and customers have been under pressure due to macroeconomic difficulties coupled with the impact of the on-going conflict in the Middle-East. Persistent high inflation, lack of minimum wage adjustments and weakening consumer purchasing power have negatively impacted demand. According to TurkStat's Confidence Indices study, Retail Trade Confidence Index dropped from 117.7 to 110.6 as of September 2024 vs a year ago in Türkiye(1). Similarly in Pakistan, Consumer Confidence Index dropped to 31 as of September 2024 vs 34 measured in December 2023(2) .
In this context, as CCI, we have focused on what we can impact. We have remained committed to our purpose of 'creating value' for all our stakeholders, via focusing on world-class daily execution and making progress towards our long-term strategy. Accordingly, while we have posted a 9.2% y/y decline in consolidated sales volumes in 3Q24, reaching 438 million unit cases ("uc"), we have also pursued our consistent growth momentum in smaller packages, higher value generating channels and a more diversified portfolio. The macroeconomic hardship impacted our operations in Türkiye and Pakistan mostly, where we have recorded 12.2% and 22.9% y/y volume decline. In the remainder of CCI's international operations, we have recorded 1.3% y/y volume growth in 3Q24. Robust performance of Iraq and Azerbaijan and gradual recovery of Kazakhstan were the main reasons behind the successful volume generation of our international business.
In 3Q24, we continued to diversify our portfolio with the stills category reaching 9.6% of our total sales volume vis-à-vis 8.2% recorded same period last year. During the quarter, we have observed weakening purchasing power impacting sparkling beverages category the most due to the relatively more discretionary nature of the consumption occasions compared to the still and water categories. Consequently, while sparkling volume was down by 12.0% y/y in 3Q24; stills volume continued its remarkable performance with 6.8% y/y improvement.
As mentioned, we continued to focus on our purpose of 'creating value' for all our stakeholders. Hence, our focus on quality mix continued in 3Q24 too with ongoing improvement in immediate consumption ("IC") package share and channel mix. Accordingly, the share of IC packs increased by 307 bps y/y in 3Q24, reaching 29.4%, on top of 216 bps y/y improvement recorded in 3Q23. From a channel perspective, share of Traditional channel increased by 46 bps y/y, on top of 79 bps y/y growth realized in 3Q23.
(1) Turkstat - https://data.tuik.gov.tr/Bulten/Index?p=Services,-Retail-Trade-and-Construction-Confidence-Indices-September-2024-53633 (2) State Bank of Pakistan - https://www.sbp.org.pk/research/CSS/Reports/2024/CCS-Sep-2024.pdf
| Change (YoY) | Breakdown | Change (YoY) | Breakdown | |||
|---|---|---|---|---|---|---|
| 3Q24 | 3Q23 | 3Q24 | 3Q23 | 9M24 | 9M24 | |
| Sparkling | -12.0% | 1.8% | 79% | 82% | -6.4% | 81% |
| Stills | 6.8% | 8.2% | 10% | 8% | 9.6% | 9% |
| Water | 0.3% | 10.1% | 11% | 10% | 5.0% | 10% |
| Total | -9.2% | 3.1% | 100% | 100% | -4.1% | 100% |
Totals may not add up due to rounding differences.
In 3Q24, Türkiye recorded 12.2% y/y volume decline, reaching 176 million uc. Turkish consumers were negatively impacted from persistent high inflation, where on a compounded basis official headline inflation index reached 7x vs 2018(3) . According to TurkStat's Confidence Indices study, Retail Trade Confidence Index dropped from 117.7 to 110.6 as of September 2024 vs a year ago in Türkiye(4) . Moreover, the number of tourists entering Türkiye during summer slowed down to 3% y/y in 2024, significantly lower compared to 40% average growth recorded in the previous two years(5) . In addition, lack of minimum wage adjustment in July and lingering geopolitical issues in the Middle-East, continued to negatively impact our operations.
On the other hand, CCI's dedicated focus on quality mix and right execution daily paved the way for a year-to-date market share expansion as well as progress towards our strategic ambition to evolve with consumers. As such, in Türkiye, the share of low & no sugar products among sparkling beverages improved by 90 bps y/y in 3Q24, reaching 6.4%. Similarly, on-going growth of Fuse Tea continued and on top of 22.9% y/y improvement realized in 3Q23, we have expanded the brand further by 6.6% y/y in 3Q24. While the share of IC packages increased by 181 bps y/y in 3Q24, the share of On-Premise channel went up by 31 bps y/y. Our dedicated focus on the Traditional Channel along with our quality execution paved the way for 191 bps y/y increase recorded in the share of Traditional Channel. In consequence, CCI's volume and value market share in sparkling improved by 3.4pp and 2.4pp, respectively as of September 2024 vs December 2023(6) .
Excluding Pakistan, where similar difficulties as in Türkiye were observed, international operations posted 1.3% y/y volume growth during 3Q24. Including the 22.9% y/y decline in Pakistan, total international operations volume reached 262 million uc, with 7.1% y/y decrease. Iraq and Azerbaijan continued their strong growth momentum and recorded 6.7% and 6.2% y/y increase in 3Q24, respectively. Similarly, Kazakhstan showed gradual recovery from the high-base of the previous year and stood flat vs 3Q23.
Category-wise, Adult Sparkling Premium category including Schweppes posted 30% y/y growth in 3Q24 thanks to the significant focus undertaken in Kazakhstan and Azerbaijan. IC
(6) Nielsen
(3) Turkstat - https://data.tuik.gov.tr/Bulten/Index?p=Consumer-Price-Index-September-2024-53618
(4) Turkstat - https://data.tuik.gov.tr/Bulten/Index?p=Services,-Retail-Trade-and-Construction-Confidence-Indices-September-2024-53633 (5) Ministry of Culture & Tourism - https://yigm.ktb.gov.tr/TR-201116/turizm-gelirleri-ve-giderleri.html
share in international operations also surged by 36 bps y/y on top of 383 bps y/y expansion realized in 3Q23.
Kazakhstan, in line with our expectations, showed signs of gradual recovery from the weaknesses realized in the previous quarters, where foreign consumers moving back to their countries, high base of last year and limited summer stocking had negatively impacted the operation. In 3Q24, Kazakhstan volumes stood flattish vs 3Q23 and reached 49 million uc. In addition, our volume market share in sparkling category has increased by 18 bps y/y as of September-end on a YtD trailing basis vs same period last year(7) .
Pakistan continued to experience macroeconomic challenges, as the pre-agreed IMF package deal is yet to be finalized and consumer confidence remained weak with Consumer Confidence Index reaching 31 as of September 2024 vs 34 measured in December 2023(8) . In this context, we deliberately ensured our products' affordability via focusing on both profitable and affordable packages such as returnable glass bottles and via adhering to our proven revenue growth management strategies. As such, we have posted 365 bps y/y improvement in IC share and 69 bps y/y increase in the share of On-Premise channel. Moreover, the share of returnable glass bottles among sparkling beverages also increased by 179 bps y/y.
Following the 26.7% y/y volume growth realized in 3Q23, Uzbekistan sales volume remained subdued with 6.5% y/y decline in 3Q24, as both the high base of last year and consumers' weakening purchasing power after the introduction of the excise tax (as of 1st of April) negatively impacted demand. Improved execution in the field continued to deliver strong results with cooler coverage reaching 82.4% vs 75.0% a year ago. In addition, share of On-Premise channel increased by 108 bps y/y to 13.2%.
(7) Nielsen
(8) State Bank of Pakistan - https://www.sbp.org.pk/research/CSS/Reports/2024/CCS-Sep-2024.pdf
Based on the CMB's decision dated 28 December 2023 and numbered 81/1820 and the "Implementation Guide on Financial Reporting in High Inflation Economies" published by the POA with the announcement made on 23 November 2023, issuers and capital market institutions subject to financial reporting regulations applying Turkish Accounting/Financial Reporting Standards will apply inflation accounting by applying the provisions of TAS 29, starting from their annual financial reports for the accounting periods ending as of December 31, 2023.
As of September 30, 2024, an adjustment has been made in accordance with the requirements of TAS 29 ("Financial Reporting in High Inflation Economies") regarding the changes in the general purchasing power of the Turkish Lira. TAS 29 requirements require that financial statements prepared in the currency in circulation in the economy with high inflation be presented at the purchasing power of this currency at the balance sheet date and that the amounts in previous periods are rearranged in the same way. The indexing process was carried out using the coefficient obtained from the Consumer Price Index in Turkey published by the Turkish Statistical Institute ("TUIK").
The relevant figures for the previous reporting period are rearranged by applying the general price index so that comparative financial statements are presented in the unit of measurement valid at the end of the reporting period. Information disclosed for previous periods is also presented in the measurement unit valid at the end of the reporting period.
However, certain items from our financials are also presented without inflation adjustment for information purposes in order to give an idea of our performance relative to our 2024 forecasts, which we announced at the beginning of the year and which we stated were based on the financials without inflation adjustment. These unaudited figures are clearly labelled where relevant. All financial figures without such disclosure are reported in accordance with TAS29.
| Net Sales Revenue (TL mln) | NSR per U.C. (TL) | |||
|---|---|---|---|---|
| 3Q24 | YoY Change | 3Q24 | YoY Change | |
| Türkiye | 18,446 | -18.3% | 104.5 | -6.9% |
| International | 18,342 | 2.3% | 70.1 | 10.1% |
| Consolidated | 36,711 | -9.3% | 83.8 | -0.1% |
• Proactive and successful cost management in Türkiye supported the gross margin positively, while the deliberate choice of prudent price adjustments in the international operations has impacted the gross margin in the international business. Accordingly, Türkiye recorded 550 bps y/y gross margin improvement in 3Q24, while international operations delivered 266 bps
y/y contraction. All in all, consolidated gross margin is realized as 36.4% with 129 bps y/y expansion.
| Financial Income / (Expense) (TL million) | 3Q24 | 3Q23 | 9M24 | 9M23 |
|---|---|---|---|---|
| Interest income | 549 | 302 | 1,292 | 841 |
| Interest expense (-) | -2,216 | -1,525 | -6,713 | -4,192 |
| FX gain / (loss) – Borrowings | -476 | -250 | -1,379 | -3,575 |
| Other | -23 | 198 | 476 | 2,899 |
| Financial Income / (Expense) Net | -2,166 | -1,275 | -6,324 | -4,026 |
• Consolidated debt was 43.7 billion TL (USD 1,277 million) by 30 September 2024 and consolidated cash was 18.9 billion TL (USD 555 million), bringing consolidated net debt to 24.7 billion TL (USD 722 million). Net Debt to consolidated EBITDA was 1.02x as of September 30, 2024.
| Financial Leverage Ratios | 9M24 | 2023 |
|---|---|---|
| Net Debt / EBITDA | 1.02 | 0.82 |
| Debt Ratio (Total Fin. Debt / Total Assets) | 30% | 34% |
| Fin. Debt-to-Equity Ratio | 72% | 82% |
| Maturity Date | 2024 | 2025 | 2026 | 2027 | 2028-30 |
|---|---|---|---|---|---|
| % of total debt | 13% | 29% | 7% | 3% | 48% |
CCI is fully compliant with the regulation to implement TAS 29 (Financial Reporting in Hyperinflationary Economies) in accordance with Capital Markets Board Bulletin dated 28.12.2023 and numbered 2023/81 and therefore has presented its financials starting from the annual financial reports for the accounting periods ending on and after 31.12.2023 in line with the regulatory framework as above. The following section is presented without the impact of TAS 29 in order to allow an assessment of the material expectations/assumptions/guidance shared previously and is unaudited.
| Consolidated (million TL) | 3Q24 | 3Q23 | Change % | 9M24 | 9M23 | Change % |
|---|---|---|---|---|---|---|
| Volume (million UC) | 438 | 482 | -9.2% | 1,231 | 1,283 | -4.1% |
| Net Sales | 39,596 | 31,734 | 24.8% | 104,116 | 70,563 | 47.6% |
| Gross Profit | 14,842 | 11,933 | 24.4% | 39,338 | 25,227 | 55.9% |
| EBIT | 7,710 | 6,949 | 11.0% | 19,698 | 13,952 | 41.2% |
| EBITDA | 8,849 | 7,687 | 15.1% | 22,861 | 15,658 | 46.0% |
| Net Income/(Loss) | 4,419 | 4,327 | 2.1% | 9,905 | 7,749 | 27.8% |
| Gross Profit Margin | 37.5% | 37.6% | 37.8% | 35.8% | ||
| EBIT Margin | 19.5% | 21.9% | 18.9% | 19.8% | ||
| EBITDA Margin | 22.3% | 24.2% | 22.0% | 22.2% | ||
| Net Income Margin | 11.2% | 13.6% | 9.5% | 11.0% | ||
| Türkiye (million TL) | 3Q24 | 3Q23 | Change % | 9M24 | 9M23 | Change % |
| Volume (million UC) | 176 | 201 | -12.2% | 464 | 479 | -3.2% |
| Net Sales | 17,856 | 13,796 | 29.4% | 43,556 | 28,957 | 50.4% |
| Gross Profit | 7,871 | 5,711 | 37.8% | 19,032 | 10,679 | 78.2% |
| EBIT (Exc. other) | 3,380 | 2,785 | 21.4% | 7,308 | 4,254 | 71.8% |
| EBITDA (Exc. other) | 3,618 | 2,963 | 22.1% | 8,024 | 4,796 | 67.3% |
| Net Income/(Loss) | 5,654 | 3,196 | 76.9% | 7,594 | -1,383 | n.m. |
| Gross Profit Margin | 44.1% | 41.4% | 43.7% | 36.9% | ||
| EBIT Margin (Exc. other) | 18.9% | 20.2% | 16.8% | 14.7% | ||
| EBITDA Margin (Exc. other) | 20.3% | 21.5% | 18.4% | 16.6% | ||
| Net Income Margin | 31.7% | 23.2% | 17.4% | -4.8% | ||
| International operations (million TL) | 3Q24 | 3Q23 | Change % | 9M24 | 9M23 | Change % |
| Volume (million UC) | 262 | 282 | -7.1% | 767 | 804 | -4.6% |
| Net Sales | 21,813 | 17,955 | 21.5% | 60,726 | 41,639 | 45.8% |
| Gross Profit | 7,039 | 6,239 | 12.8% | 20,443 | 14,578 | 40.2% |
| EBIT (Exc. other) | 3,744 | 3,916 | -4.4% | 11,015 | 8,904 | 23.7% |
EBITDA (Exc. other) 4,574 4,498 1.7% 13,367 10,338 29.3% Net Income/(Loss) 2,710 3,358 -19.3% 7,475 11,203 -33.3%
Gross Profit Margin 32.3% 34.7% 33.7% 35.0% EBIT Margin (Exc. other) 17.2% 21.8% 18.1% 21.4% EBITDA Margin (Exc. other) 21.0% 25.0% 22.0% 24.8% Net Income Margin 12.4% 18.7% 12.3% 26.9%
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 September 30, 2024, the list of CCI's subsidiaries and joint ventures is as follows:
| Subsidiaries and Joint Ventures | Country | Consolidation Method |
|---|---|---|
| Coca-Cola Satış ve Dağıtım A.Ş. | Türkiye | Full Consolidation |
| JV Coca-Cola Almaty Bottlers LLP | Kazakhstan | Full Consolidation |
| Azerbaijan Coca-Cola Bottlers LLC | Azerbaijan | Full Consolidation |
| Coca-Cola Bishkek Bottlers Closed J. S. Co. | Kyrgyzstan | Full Consolidation |
| CCI International Holland BV. | Holland | Full Consolidation |
| The Coca-Cola Bottling Company of Jordan Ltd | Jordan | Full Consolidation |
| Turkmenistan Coca-Cola Bottlers | Turkmenistan | Full Consolidation |
| Sardkar for Beverage Industry Ltd | Iraq | Full Consolidation |
| Waha Beverages BV. | Holland | Full Consolidation |
| Coca-Cola Beverages Tajikistan LLC | Tajikistan | Full Consolidation |
| Al Waha LLC | Iraq | Full Consolidation |
| Coca-Cola Beverages Pakistan Ltd | Pakistan | Full Consolidation |
| Coca-Cola Bottlers Uzbekistan Ltd | Uzbekistan | Full Consolidation |
| CCI Samarkand Ltd LLC | Uzbekistan | Full Consolidation |
| CCI Namangan Ltd LLC | Uzbekistan | Full Consolidation |
| Anadolu Etap Penkon Gıda ve İçecek Ürünleri A. Ş | Türkiye | Full Consolidation |
| Syrian Soft Drink Sales and Distribution LLC | Syria | Equity Method |
| Coca-Cola Bangladesh Beverages Ltd. | Bangladesh | Full Consolidation |
The Company's "Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA)" definition and calculation is 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 noncash expenses like negative goodwill and value increase due to change in scope of consolidation. As of September 30, 2024, and September 30, 2023, the reconciliation of EBITDA to profit / (loss) from operations is explained in the following table:
| EBITDA (TL million) | 3Q24 | |||
|---|---|---|---|---|
| TAS 29 (Financial Reporting in Hyperinflationary Economies) implemented | 3Q23 | 9M24 | 9M23 | |
| Profit / (loss) from operations | 6,445 | 7,504 | 17,748 | 18,853 |
| Depreciation and amortization | 1,225 | 1,030 | 3,898 | 3,628 |
| Provision for employee benefits | 63 | 15 | 291 | 245 |
| Foreign exchange (gain) / loss under other operating income / expense | 60 | 19 | 75 | -440 |
| Right of use asset amortization | 52 | 41 | 165 | 182 |
| EBITDA | 7,845 | 8,609 | 22,176 | 22,468 |
Totals may not foot due to rounding differences.
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 asset accounts are translated into TL with the official TL exchange rate of USD buying on September 30, 2024, USD 1,00 (full) = TL 34,1210 (December 31, 2023; USD 1,00 (full) = TL 29,4382) whereas USD amounts in the liability accounts are translated into TL with the official TL exchange rate of USD selling on September 30, 2024, USD 1,00 (full) = TL 34,1825 (December 31, 2023; USD 1,00 (full) = TL 29,4913). Furthermore, USD amounts in the income statement are translated into TL, at the average TL exchange rate for USD buying for the period is USD 1,00 (full) = TL 32,2299 (January 1 - September 30, 2023; USD 1,00 (full) = TL 22,1887).
| 9M24 | 9M23 |
|---|---|
| 32,2299 | 22,1887 |
| 34,1210 | 27,3767 |
| 34,1825 | 27,4260 |
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 in the usage of closing and average exchange rates are followed under currency translation differences classified under equity.
The forward-looking guidance below is given on an organic basis and without any potential impact from the implementation of TAS 29 (Financial Reporting in Hyperinflationary Economies) and may change as per TAS 29. In order to provide a comparison with our previously shared guidance on Jan 8th 2024, we again release the below guidance based on historical figures (i.e. without TAS 29).
Q3 2024 is confirming the persistent nature of high inflation, the spill-over of the on-going conflict in the Middle-East, the corresponding prolonged dent on consumer confidence as well as weakening purchasing power in our key operating regions of Türkiye and Pakistan.
Within this unprecedented challenging context, we are remaining focused on what we can control and are committed to our purpose of 'creating value' for all our stakeholders, via focusing on world-class daily execution and making progress towards our long-term strategy.
As a consequence, reflecting about 2024 to-date, despite volume being under pressure, we have strengthened our fundamentals by increasing competitiveness and making progress towards our long term strategic aspiration by accelerating small packages, diversifying our beverages portfolio and growing faster in traditional trade and on-premise. Our relentless focus on quality revenue growth and cost control have both contributed to manage margin within an acceptable range.
Therefore, taking into account the most recent trends, our actions and our progress towards the long-term, we update our full year guidance:
-volume from "flat-to-low-single-digit growth" to "low-to-mid-single-digit volume decline"
-Due to the revised volume guidance, our FX-neutral Net Sales Revenue growth guidance also changes from "low 30s % growth" to "high 10s to low 20s % growth"
Our company's expectations for 2024 are as follows (on an organic basis and without any potential impact from the implementation of inflation accounting):
Low-to-Mid-single-digit volume decline on a consolidated basis;
High 10s to Low 20s percentage FX-neutral NSR growth
Slight-decline-to-Flat vs previous year
| Unaudited | ||||||||
|---|---|---|---|---|---|---|---|---|
| January 1 - September 30 | July 1 - September 30 | |||||||
| (TL million) | 2024 | 2023 | Change (%) | 2024 | 2023 | Change (%) | ||
| Sales Volume (UC millions) | 1,231 | 1,283 | -4.1% | 438 | 482 | -9.2% | ||
| Revenue | 108,727 | 114,529 | -5.1% | 36,711 | 40,477 | -9.3% | ||
| Cost of Sales | -69,476 | -76,465 | -9.1% | -23,345 | -26,262 | -11.1% | ||
| Gross Profit from Operations | 39,251 | 38,064 | 3.1% | 13,366 | 14,215 | -6.0% | ||
| Distribution, Selling and Marketing Expenses |
-16,849 | -15,404 | 9.4% | -5,697 | -5,264 | 8.2% | ||
| General and Administrative Expenses | -5,195 | -4,264 | 21.8% | -1,582 | -1,446 | 9.4% | ||
| Other Operating Income | 2,327 | 2,962 | -21.4% | 599 | 724 | -17.4% | ||
| Other Operating Expense | -1,786 | -2,505 | -28.7% | -240 | -725 | -66.8% | ||
| Profit/(Loss) from Operations | 17,748 | 18,853 | -5.9% | 6,445 | 7,504 | -14.1% | ||
| Gain/(Loss) From Investing Activities | -212 | -34 | 522.6% | -184 | 53 | n.m. | ||
| Gain/(Loss) from Associates | -4 | -22 | 81.6% | -0.2 | -1.1 | 77.6% | ||
| Profit/(Loss) Before Financial Income/(Expense) |
17,532 | 18,797 | -6.7% | 6,261 | 7,556 | -17.1% | ||
| Financial Income | 3,157 | 7,327 | -56.9% | 1,111 | 1,627 | -31.7% | ||
| Financial Expenses | -9,481 | -11,353 | -16.5% | -3,277 | -2,902 | 12.9% | ||
| Monetary Gain /(Loss) | 7,858 | 15,724 | -50.0% | 2,181 | 10,906 | -80.0% | ||
| Profit/(Loss) Before Tax | 19,066 | 30,495 | -37.5% | 6,275 | 17,186 | -63.5% | ||
| Deferred Tax Income/(Expense) | -570 | -3,075 | -81.5% | -864 | -1,882 | -54.1% | ||
| Current Period Tax Expense | -4,156 | -4,632 | -10.3% | -218 | -1,555 | -86.0% | ||
| Net Income/(Loss) Before Minority | 14,340 | 22,788 | -37.1% | 5,193 | 13,749 | -62.2% | ||
| Minority Interest | -70 | -744 | -90.6% | -21 | -362 | -94.3% | ||
| Net Income | 14,270 | 22,044 | -35.3% | 5,173 | 13,387 | -61.4% | ||
| EBITDA | 22,176 | 22,468 | -1.3% | 7,845 | 8,609 | -8.9% |
| January 1 - September 30 | July 1 - September 30 | ||||||
|---|---|---|---|---|---|---|---|
| (TL million) | 2024 | 2023 | Change (%) | 2024 | 2023 | Change (%) | |
| Sales Volume (UC millions) | 464 | 479 | -3.2% | 176 | 201 | -12.2% | |
| Revenue | 48,186 | 52,389 | -8.0% | 18,446 | 22,566 | -18.3% | |
| Cost of Sales | -29,221 | -36,045 | -18.9% | -10,850 | -14,515 | -25.3% | |
| Gross Profit from Operations | 18,965 | 16,344 | 16.0% | 7,596 | 8,051 | -5.7% | |
| Distribution, Selling and Marketing Expenses |
-10,058 | -9,070 | 10.9% | -3,592 | -3,670 | -2.1% | |
| General and Administrative Expenses | -3,601 | -2,947 | 22.2% | -1,215 | -1,063 | 14.3% | |
| Other Operating Income | 9,890 | 12,274 | -19.4% | 5,006 | 3,845 | 30.2% | |
| Other Operating Expense | -930 | -9,327 | -90.0% | -101 | -200 | -49.6% | |
| Profit/(Loss) from Operations | 14,267 | 7,273 | 96.1% | 7,693 | 6,963 | 10.5% | |
| Gain/(Loss) From Investing Activities | -85 | -92 | -7.2% | -58 | 43 | n.m. | |
| Profit/(Loss) Before Financial Income/(Expense) |
14,181 | 7,182 | 97.5% | 7,636 | 7,006 | 9.0% | |
| Financial Income | 2,531 | 4,101 | -38.3% | 940 | 1,147 | -18.1% | |
| Financial Expenses | -11,048 | -18,621 | -40.7% | -3,590 | -4,067 | -11.7% | |
| Monetary Gain /(Loss) | 7,858 | 15,724 | -50.0% | 2,181 | 10,906 | -80.0% | |
| Profit/(Loss) Before Tax | 13,523 | 8,386 | 61.3% | 7,166 | 14,992 | -52.2% | |
| Deferred Tax Income/(Expense) | 141 | -613 | n.m. | -689 | -1,437 | -52.0% | |
| Current Period Tax Expense | -1,595 | -1,352 | 18.0% | 313 | -569 | n.m. | |
| Net Income/(Loss) Before Minority | 12,068 | 6,421 | 87.9% | 6,789 | 12,985 | -47.7% | |
| Minority Interest | 0 | -173 | n.m. | 7 | -130 | n.m | |
| Net Income | 12,068 | 6,248 | 93.2% | 6,796 | 12,856 | -47.1% | |
| EBITDA | 16,320 | 9,140 | 78.5% | 8,438 | 7,584 | 11.3% |
| Unaudited | |||||||
|---|---|---|---|---|---|---|---|
| January 1 - September 30 | July 1 - September 30 | ||||||
| (TL million) | 2024 | 2023 | Change (%) | 2024 | 2023 | Change (%) | |
| Sales Volume (UC millions) | 767 | 804 | -4.6% | 262 | 282 | -7.1% | |
| Revenue | 60,726 | 62,202 | -2.4% | 18,342 | 17,936 | 2.3% | |
| Cost of Sales | -40,283 | -40,424 | -0.3% | -12,498 | -11,745 | 6.4% | |
| Gross Profit from Operations | 20,443 | 21,777 | -6.1% | 5,844 | 6,191 | -5.6% | |
| Distribution, Selling and Marketing Expenses |
-6,790 | -6,334 | 7.2% | -2,104 | -1,595 | 31.9% | |
| General and Administrative Expenses | -2,637 | -2,143 | 23.1% | -644 | -618 | 4.3% | |
| Other Operating Income | 964 | 8,369 | -88.5% | 365 | -415 | n.m. | |
| Other Operating Expense | -857 | -1,174 | -27.0% | -141 | -524 | -73.1% | |
| Profit/(Loss) from Operations | 11,121 | 20,496 | -45.7% | 3,319 | 3,040 | 9.2% | |
| Gain/(Loss) From Investing Activities | -127 | 58 | n.m. | -126 | 10 | n.m. | |
| Gain/(Loss) from Associates | -4 | -22 | 81.6% | -0.2 | -1.1 | 77.6% | |
| Profit/(Loss) Before Financial Income/(Expense) |
10,990 | 20,532 | -46.5% | 3,193 | 3,049 | 4.7% | |
| Financial Income | 688 | 3,288 | -79.1% | 178 | 498 | -64.4% | |
| Financial Expenses | -1,994 | -3,698 | -46.1% | -549 | -506 | 8.3% | |
| Profit/(Loss) Before Tax | 9,684 | 20,121 | -51.9% | 2,822 | 3,040 | -7.2% | |
| Deferred Tax Income/(Expense) | 40 | -257 | n.m. | -22 | -81 | -72.2% | |
| Current Period Tax Expense | -2,180 | -2,558 | -14.8% | -487 | -654 | -25.6% | |
| Net Income/(Loss) Before Minority | 7,545 | 17,306 | -56.4% | 2,313 | 2,305 | 0.3% | |
| Minority Interest | -70 | -570 | -87.7% | -28 | -232 | -88.1% | |
| Net Income | 7,475 | 16,736 | -55.3% | 2,285 | 2,073 | 10.2% | |
| EBITDA | 13,823 | 22,500 | -38.6% | 4,142 | 3,608 | 14.8% |
| September 30, 2024 December 31, 2023 Current Assets 61,554 65,558 Cash and Cash Equivalents 18,087 29,556 Investments in Securities 861 511 Trade Receivables 19,843 11,975 Other Receivables 453 164 Derivative Financial Instruments 153 192 Inventories 15,597 17,638 Prepaid Expenses 3,798 2,536 Tax Related Current Assets 850 863 Other Current Assets 1,913 2,124 Non-Current Assets 83,863 84,102 Other Receivables 166 183 Property, Plant and Equipment 51,270 47,870 Goodwill 5,703 6,311 Intangible Assets 23,275 26,221 Right of Use Asset 716 737 Prepaid Expenses 1,735 1,654 Deferred Tax Asset 990 789 Derivative Financial Instruments 9 45 Other Non-Current Assets 0 293 Total Assets 145,418 149,661 Current Liabilities 51,870 56,393 Short-term Borrowings 13,539 11,593 Current Portion of Long-term Borrowings 2,845 12,948 Bank borrowings 2,592 12,681 Finance lease payables 252 266 Trade Payables 27,773 25,265 Due to related parties 7,792 10,449 Other trade payables to third parties 19,981 14,816 Payables Related to Employee Benefits 414 491 Other Payables 4,901 3,388 Due to related parties 233 314 Other payables to third parties 4,668 3,074 Derivative Financial Instruments 1 378 Deferred Income 566 279 Provision for Corporate Tax 680 556 Current Provisions 1,003 1,313 Other Current Liabilities 150 182 Non-Current Liabilities 32,612 32,192 Long-term Borrowings 26,675 25,150 Financial lease payables 605 631 Trade Payables 4 7 Provision for Employee Benefits 890 994 Deferred Tax Liability 4,427 5,346 Derivative Financial Instruments 0 4 Deferred Income 11 60 Equity of the Parent 53,519 53,375 Minority Interest 7,417 7,701 Total Liabilities 145,418 149,661 |
(TL million) | Unaudited | Audited | |
|---|---|---|---|---|
| Unaudited Period End |
||
|---|---|---|
| (TL million) | September 30, 2024 |
September 30, 2023 |
| Cash Flow from Operating Activities | ||
| IBT Adjusted for Non-cash items | 17,375 | 23,751 |
| Change in Tax Assets and Liabilities | -3,950 | -2,922 |
| Employee Term. Benefits, Vacation Pay, Management Bonus Payment |
-318 | -825 |
| Change in other current and non-current assets and liabilities | -304 | -6,639 |
| Change in Operating Assets & Liabilities | -367 | 312 |
| Net Cash Provided by Operating Activities | 12,435 | 13,677 |
| Purchase of Property, Plant & Equipment | -9,001 | -6,376 |
| Other Net Cash Provided by/ (Used in) Investing Activities | -675 | -140 |
| Cash inflow/outflow from acquisition of subsidiary | -814 | -4,080 |
| Net Cash Used in Investing Activities | -10,491 | -10,596 |
| Interest Paid | -6,257 | -3,819 |
| Interest Received | 1,151 | 841 |
| Change in ST & LT Loans | -251 | 3,287 |
| Dividends paid (including non-controlling interest) | -2,343 | -1,446 |
| Cash flow hedge reserve | -829 | -5 |
| Change in finance lease payables | -252 | -275 |
| Other | -4,217 | 0 |
| Net Cash Provided by / (Used in) Financing Activities | -12,998 | -1,416 |
| Currency Translation Differences | 691 | -295 |
| Monetary gain / loss on cash and cash equivalents | -1,107 | -1,178 |
| Net Change in Cash & Cash Equivalents | -11,469 | 191 |
| Cash & Cash Equivalents at the beginning of the period | 29,556 | 31,361 |
| Cash & Cash Equivalents at the end of the period | 18,087 | 31,552 |
| Free Cash Flow | -1,923 | 4,048 |
Totals may not foot due to rounding differences.
| Investor Relations Contacts: | Media Contacts: |
|---|---|
| Melda Öztoprak | Burçun İmir |
| Investor Relations Senior Manager | Chief Corporate Affairs and Sustainability Officer |
| Tel: +90 216 528 4367 | Tel: +90 216 528 4209 |
| E-mail: [email protected] | E-mail: [email protected] |
| Tuğçe Tarhan | |
| Investor Relations Executive | |
| Tel: +90 216 528 4119 | |
| E-mail: [email protected] | |
CCI is a multinational beverage company which operates in Türkiye, Pakistan, Kazakhstan, Iraq, Uzbekistan, Bangladesh, Azerbaijan, Kyrgyzstan, Jordan, Tajikistan, Turkmenistan, and Syria. CCI produces, distributes and sells sparkling and still beverages of The Coca-Cola Company and Monster Energy Beverage Corporation along with the production of fruit juice concentrate via its affiliate Anadolu Etap İçecek (Anadolu Etap Penkon Gıda ve İçecek Ürünleri Sanayi ve Ticaret Anonim Şirket).
CCI employs more than 10,000 people, has a total of 33 bottling plants, and 3 fruit processing plants in 12 countries, offering a wide range of beverages to a population base of 600 million people. In addition to sparkling beverages, the product portfolio includes juices, waters, sports and energy drinks, iced teas and coffee.
CCI's shares are traded on the Borsa Istanbul Stock Exchange (BIST) under the symbol "CCOLA.IS".
Reuters: CCOLA.IS Bloomberg: CCOLA.TI
18 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 Türkiye and CCI's other markets; other changes in the political or economic environment in Türkiye or CCI's other markets; adverse weather conditions during the summer months; changes in the level of tourism in Türkiye; 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.
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