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Edited Transcript of CCOLA.IS earnings conference call or presentation 3-May-19 1:00pm GMT

Q1 2019 Coca-Cola Icecek AS Earnings Call

Ümraniye Ýstanbul Mar 27, 2020 (Thomson StreetEvents) -- Edited Transcript of Coca-Cola Icecek AS earnings conference call or presentation Friday, May 3, 2019 at 1:00:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Andriy Avramenko

Coca-Cola Içecek Anonim Sirketi - CFO

* Burak Basarir

Coca-Cola Içecek Anonim Sirketi - CEO

* Yesim Tohma

Coca-Cola Içecek Anonim Sirketi - Group IR Manager

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Conference Call Participants

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* Cemal Demirtas

Ata Invest Co., Research Division - Head of Research

* Douglas Turnbull

Invesco Perpetual - Senior Analyst

* Hanzade Kilickiran

JP Morgan Chase & Co, Research Division - Analyst

* Thomas Vester

LGM (Bermuda) Limited - CIO & Portfolio Manager

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Presentation

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Operator [1]

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Ladies and gentlemen, welcome to Coca-Cola Quarter 1 2019 Results Webcast. I will now hand over to Ms. Yesim Tohma, Head of Investor Relations. Ma'am, please go ahead.

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Yesim Tohma, Coca-Cola Içecek Anonim Sirketi - Group IR Manager [2]

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Thank you. Good morning and good afternoon, ladies and gentlemen. Welcome to our first quarter 2019 results webcast. Today, our CEO, Burak Basarir, will briefly talk about our operations. Then our CFO, Andriy Avramenko, will share with you the financial review. Following the closing remarks by our CEO, we'll start the Q&A session.

Before we begin, please kindly be advised of our cautionary statement that this conference call may contain forward-looking management comments, including projections, and these should be considered in conjunction with the cautionary language contained in our earnings release. A copy of the earnings release and financials are available on our website.

And now let me turn the call over to Mr. Basarir.

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Burak Basarir, Coca-Cola Içecek Anonim Sirketi - CEO [3]

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Well, thank you, Yesim. Good morning and good afternoon, everyone, and thank you for joining our call today.

We started the year with significant macro headwinds in most of our markets while cycling a very strong base in the first quarter. Sales volume was impacted by lower NRTD Tea volume in Turkey and lower Sparkling volume in Pakistan. Yet, we managed to record double-digit revenue growth and increased our EBITDA on a consolidated basis on the back of rigorous market execution and continued focus on effective cost management.

In Turkey, our growth was remarkable given the prevailing challenges in the marketplace. Excluding NRTD Tea, we grew our volume by 4.1%, with healthy sales mix and continued to deliver quality growth with margin expansions.

In Pakistan, the deteriorating macroeconomic environment continued to put pressure on overall industry growth. Nonetheless, we've continued to strengthen our market position in the country. Central Asia maintained its strong momentum with double-digits growth in key markets. On the other hand, prolonged currency conversion problem in Turkmenistan still results in interruptions in our operations.

Following a seasonally low quarter, we maintained our full year guidance and focused on achieving our targets for the rest of the year.

Let me move on to the next page for the first quarter highlights.

Total sales volume was down by 1.8%, cycling a high base both in Turkey and international operations. On the other hand, excluding non-ready-to-drink tea, volume was up by 0.6%. Lower growth was mainly attributable to challenging trading environment in Pakistan operations. Despite the slowdown in volume, growth in our net sales revenue continued to rise on the back of Turkey and Kazakhstan operations, along with positive FX conversion impact of international operations. On an FX-neutral basis, consolidated sales revenue was up by 8.8%.

Finally, EBITDA continued to grow, albeit at a slower pace, which reflects a lower contribution of our international operations.

Let me turn to a brief overview of our categories. The Sparkling category declined by 1.8%, cycling a strong 11.5% growth in the same period of last year. While the category maintained its increasing trend in Turkey and Central Asia, lower volumes in Pakistan, Turkmenistan and Middle East resulted in the contraction.

Within the Sparkling category, Coca-Cola trademark continued to grow on a consolidated basis. Coca-Cola No Sugar, once again, outperformed the category with double-digit growth and the share of sugar-free product in Sparkling increased by 50 basis points compared to the first quarter of 2018.

Stills grew by 14%, which was mainly led by the robust growth of Ice Tea and Juice categories. Ice Tea was up by 28%, mainly driven by Kazakhstan and Turkey operations. Increasing brand investment and new listings were main drivers of above 20% Ice Tea volume growth in Turkey.

In Kazakhstan, Ice Tea growth was more than 35%, supported by new flavor expansions. The Water category delivered also 6% growth, driven by immediate consumption packages. The category recorded a growth in all major markets. Finally, non-ready-to-drink tea volume was down by 18%, which was adversely impacted by increase in list prices last year. Let me now go through our Turkey operations. We have maintained our quality growth in Turkey despite macro headwinds and weakening consumer sentiment. As we've cycled 14% growth in the first quarter, we recorded volume growth in all categories, except for the NRTD Tea.

The Sparkling category grew almost by 3%, along with the continuous success of Coca-Cola No Sugar. Strong market execution and contribution of new on-premise account namely Burger King were the main drivers of growth which also helped drive immediate consumption and transactions ahead of volume growth.

Stills category grew by more than 12% in the first quarter, driven by the growth of both Juice and Ice Tea categories. Brand communication accelerated cooler investment and new listings in growing channel provided a 22% growth in Ice Tea, along with increase in value share gains. Juice segment delivered high single-digit volume growth supported by successful marketing activities.

The Water category also posted 4% volume growth, mainly through IC packages. Non-ready-to-drink tea was the only category that contracted, as I said, mainly because of the price increase of last year.

In Turkey, our revenue growth management initiatives and effective cost management allowed us to achieve profitable growth in the first quarter amidst a challenging macroeconomic backdrop.

Going forward, we maintain our focus on delivering quality growth and leveraging our strong portfolio through increasing media and cooler investment in our biggest market, Turkey.

Let's now -- I'll review our international operations. In the first quarter, the volume of our international operation was down by 2.1% cycling a very strong 10.8% in the first quarter of 2018. The contraction was attributable to weak performance in Pakistan and the Middle East, while Central Asia operations continue to deliver double-digit growth. Pakistan, volume was down by 8.2% as the operating environment continues to be challenging.

Deteriorating macroeconomic conditions put a lot of pressure on private consumption, which was the lowest level of the last 2 years. This was also reflected in overall Sparkling industry as double-digit contraction. Nonetheless, we continue to gain market share despite some challenges in the short term. We are focused on strengthening our route to market to secure profitable growth going forward.

Meanwhile, we launched our new Sparkling brand, Roar, in the first quarter of the year and also reformulated Fanta brand to address our 3-brand strategy. Having secured a strong leadership ratio with the Coca-Cola brand, we are now leveraging a more diverse brand portfolio in order to build a stronger position in the overall Sparkling category.

On Pakistan, let me also touch base on some regulatory issues. Currently, there are discussions around the implementation of some potential tax increases, such as water tax. While the discussions are still underway, potential taxes may have an adverse impact on our business in Pakistan.

Turning into Middle East operations. Both Iraq and Jordan recorded contraction in volumes. In Iraq, unfavorable weather conditions and increased competition among the B brands dragged down our overall Sparkling volume. On the other hand, the security condition is also improving in Iraq, and we plan to expand our Hilla plant to capture consumer demand.

Actually, 2 production lines are being installed right now in Hilla plant, and they're going to be operational before the high season starts. Jordan, a relatively smaller market, continues to underperform due to macro challenges.

Finally, Central Asia operations continue to deliver double-digit growth. In Kazakhstan, volume was up by 19%, with double-digits growth in all categories. Azerbaijan delivered strong 26% growth, driven by more than 30% growth in the Sparkling category. On the other hand, in Turkmenistan, convertibility problem still continues and causes interruptions in our production. As a result, our sales volume in Turkmenistan was below 500,000 cases in the first quarter of '19.

Now let me turn the call over to Andriy for our financial review. Thank you.

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Andriy Avramenko, Coca-Cola Içecek Anonim Sirketi - CFO [4]

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Thank you, Burak. So financials. We started the year with some challenges in our major markets. Our consolidated financials reflect some adverse input stemming from international operations in the first quarter. Our consolidated net revenue was up by 22%, mainly driven by Turkey, Kazakhstan and positive FX conversion impact of our International segment.

Gross margin declined slightly to 31.3% from 31.7%, while expansion in Turkey's operation margin compensated for the decline in international operations margin.

Lower gross margin in international operations, coupled with inflationary pressures in Turkey's OpEx, resulted in the lower EBIT and EBITDA margin on a consolidated basis.

In the first quarter, we recorded a net loss of TRY 3 million compared with TRY 49 million net loss in the same period in 2018.

Let's now review some financial metrics, specifically, per unit case on Page 11. Our consolidated net sales revenue per unit case increased by 11% on FX-neutral basis. Turkey and Central Asia were main drivers of growth along with higher share of more profitable categories. Our gross profits per unit case grew by 12%, reflected solid growth in Turkey, which was supported by strong net revenue per case growth and cash designation mechanism. On the other hand, international operations gross profitability was adversely impacted by weaker top line growth and high raw material costs.

EBIT per unit case was down by 8.7% in the first quarter. Weaker operating profitability in Pakistan and some one-off items in other operations and international operations had some negative impact on EBIT. Operating expenses in Turkey also increased, reflecting inflationary pressures.

Now turning to the bottom line on Page 12. As I mentioned, we recorded TRY 3 million net loss against TRY 49 million in the same period in 2018. The bottom line figure was positively impacted by higher EBITDA and lower FX losses.

Moving into debt and cash metrics on Page 13. Our net debt-to-EBITDA was 1.7x in the first quarter, reflecting some increase in -- increase stemming from operating leases. Please note that effective from January 2019, operating leases started to be recorded on balance sheet within the context of IFRS 16. So it's primarily an accounting adjustment. Net working capital to sales was realized at 6% in the first quarter. This was mainly attributable to some temporary increases stemming from seasonality. Finally, CapEx to sales was slightly lower on an annualized basis. In the first quarter, 35% of the total capital expenditure was related to Turkey operations, while 65% was invested in international operations.

Now let me turn the call over back to Burak for closing remarks.

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Burak Basarir, Coca-Cola Içecek Anonim Sirketi - CEO [5]

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So thanks, Andriy. Following a challenging start to the year, we remain focused on creating value for our shareholders. As I often emphasize, we are operating in a very attractive and promising geography. Our markets offer great opportunities, but they may -- also highly volatile with some cyclical challenges.

On the other hand, given our strong presence and competitive advantage, we are well positioned to turn these challenges into opportunities.

In doing so, our strategic growth algorithm makes up the backbone of our quality growth. Each of our own markets has its own dynamics, and we have tailored strategies for each to maximize our shareholder value. While we focus on exceeding our market execution and generate further value in Turkey, we are building a sustainable growth model for Pakistan through our route-to-market practices. In Central Asia, we continue to enhance our revenue growth management capabilities and offer more choices to our consumers.

On financial management, we maintain our disciplined approach on OpEx, net working capital and also CapEx. Now I think we can open up the floor for Q&A, and thank you. And operator, please?

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Questions and Answers

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Operator [1]

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(Operator Instructions) Hanzade Kilickiran, JPMorgan.

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Hanzade Kilickiran, JP Morgan Chase & Co, Research Division - Analyst [2]

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I have two questions. The first one is related to hedging activities on the raw materials side. And how much impact do you expect with the executional pressures in Turkey on your margins? I think there's going to be a negative impact on your Turkish margins next year. And the second question is related to Pakistan. And what is the share of the water in Pakistan? And do you expect any sort of cost inflation because of this metric?

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Andriy Avramenko, Coca-Cola Içecek Anonim Sirketi - CFO [3]

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This is Andriy. Thank you for your questions. The first question I understand is about hedging activities and the impact on -- impact of commodity prices on our financials. I think we continue to dehedge in the commodities as we continued in the past. On the sugar, we are hedged 100% in all kind of open markets. As you know that very few of our markets are actually open price, majority of them are government regulated, so essentially 100% of our sugar is today predetermined in terms of the price. On aluminum and resin, we continue to hedge between 60% and 75%, similarly to what we have been doing earlier in this year and the year before. Given the trends in those commodities, we believe this is the optimum hedging for our portfolio.

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Hanzade Kilickiran, JP Morgan Chase & Co, Research Division - Analyst [4]

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And actually my question is, I would like to learn more about your FX hedging on the raw material because I remember that you hedged raw material cost at 3.95 TL-dollar rate and next year, we'll be continuing on this hedging or otherwise, are we going to see a raw material price at over TRY 5?

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Andriy Avramenko, Coca-Cola Içecek Anonim Sirketi - CFO [5]

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In terms of -- yes, now I understand. This is about cash designation. Yes, we designated $150 million for this year at 3.95. So we believe and I think you may agree with us that the cash designation provides comparability of the margins, rather than actual protection of the bottom line. So as we experienced in the past one-off kind of fluctuations and erratic fluctuations of the currency, this was a helpful instrument for us. Since the currency continues to -- Turkish currency continues to devaluate over multiple cycles, the relevance of the cash designations from our perspective is less important. We are considering for the next year whether we will do that or not, but it doesn't impact the amount of cash we will actually have on the balance sheet. So -- and from that perspective, there should not be any impact on the net bottom line. However, there is a, as you understand, there is a difference on how this impact is allocated between above EBIT and below EBIT. So we are considering still our policy for the next year and probably after the second quarter, we will be in a better position to communicate the decision.

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Hanzade Kilickiran, JP Morgan Chase & Co, Research Division - Analyst [6]

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I just wanted to be clear about this. Right now if you stop doing sales next year, does it mean that we are going to see some margin pressure on the EBITDA level in Turkey?

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Andriy Avramenko, Coca-Cola Içecek Anonim Sirketi - CFO [7]

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Yes, yes, of course. Again, this is EBIT, EBITDA will be pressured. If we go to the net income, there is no difference, right? So it's a reclassification between operational and nonoperational. We believe that also if we reduce impact of this type of reclassification, it creates clearer and more aligned incentives and goals for our operations to drive long-term profitability and therefore, we would seek to protect margins in more of an operational measures and at including underlying operational performance in terms of pricing and cost savings, rather than coming to cash designation.

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Operator [8]

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Our next question comes from Thomas Vester, LGM Investments.

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Thomas Vester, LGM (Bermuda) Limited - CIO & Portfolio Manager [9]

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I was just wondering, I mean, you maintained your guidance and -- I mean with Q1, I mean, the volume target especially international seems fairly ambitious. I mean can you just give us a sense of where you expect the -- I mean, the contribution for this to come, so you will be able to meet that? And also, I mean, if you can share anything on how Q2 started, that will be great. And then clearly, Turkmenistan is extremely tough. I mean you mentioned in the release, I think you're at 0.5 million unit cases I believe. Can you just share on what's the drop in Turkmenistan year-over-year just to get a sense of how much is taken out from your results? And/or -- and then finally, just on the seasonality, you mentioned in the release on working capital. I mean I'm not sure I understand why the seasonality from last year is any different. I mean, of course, Easter was different place this year, but I don't think there's a lot of Easter effect in most of your markets, but just if you could clarify that comment that would be great.

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Burak Basarir, Coca-Cola Içecek Anonim Sirketi - CEO [10]

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Thomas, thank you for your question. Let me answer the first 2. I mean the volume questions obviously and then how are we going to account for Turkmenistan. You're right. I mean the rest of the year's target is a bit stretched, but -- which gives us confidence that this is only in the first quarter right now. So we have the 2 big quarters in front of us. There's the second quarter and the third quarter. And then we look at our rest of the year marketing plans, they look pretty promising. Another good news is that Turkey is doing slightly better than what we have planned, much better than last year, obviously. So we think with the contribution of our Central Asia and hopefully, some recovery in Pakistan, we should be able to deliver our guidance but it's going to be -- it's not going to be an easy task -- easy rest of the year, to be honest with you.

For Turkmenistan, I mean there is nothing -- there is no improvement yet, but we're also hearing some news that the Turkmen government will also start selling some natural gas to some of the neighboring countries so -- which might open the opportunity for conversion possibilities. If the conversion is back in place, we can easily recover some of the volume we're losing. We've already lost in Turkmenistan because our team is on the ground, our supply chain is ready for up and running. But it's going to be hard to cycle Turkmenistan within the Central Asia, but we will do everything we can to make sure we recover the shortfall if we cannot sell or produce in Turkmen operations. Let me ask Andriy to talk about the net working capital piece of your question.

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Andriy Avramenko, Coca-Cola Içecek Anonim Sirketi - CFO [11]

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Yes. On the net working capital, this is the specific circumstances in Kazakhstan, in Central Asia, where they needed to secure some raw materials for the season and rebuild so that's -- these conditions are different for that specific market compared with prior year. Also taking into account the rate of growth they're showing, we felt comfortable that they're doing the right thing to make sure that they have actually secured all the materials for the season.

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Operator [12]

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Our next question comes from Cemal Demirtas, Ata Invest.

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Cemal Demirtas, Ata Invest Co., Research Division - Head of Research [13]

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I don't know if I missed the answer, but my question is related to Pakistan, related to regulatory changes. Is it going to be applicable for the future? Or did you set any provision for that for higher possibility of the implementation of new regulation? That's my first question. And could you just give some color, how much impact could it have? And is it going to be for the new production of your -- for the future? Or is it going to be applicable for the inventory side, any effect on that? That's my question. And the second one is the trends in April and maybe May, both in Pakistan and Turkey, do you see any changes?

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Andriy Avramenko, Coca-Cola Içecek Anonim Sirketi - CFO [14]

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Yes. Thank you for the questions. First one is on Pakistan regulatory discussion challenges. Yes, there are few taxes that are being discussed or kind of suggested for introduction, which are water tax then so-called sin tax or sugar tax and there is a discussion about packaging. Now the environment remains to be uncertain as we understand that the water tax, which is a large hypothetical impact on us, beverage industry and other industries like mining, textiles and so on, is being actively debated between the government, judiciary and industry. So we include in our numbers for the first quarter certain amounts. However, it's really, at this time, completely uncertain what the impact, if any, will be. There should be some or we expect there will be some impact eventually. But it's completely uncertain what the rates would be.

I think we discussed it on previous call that if law was implemented in a way that, that was introduced, then the water tax would have a significant impact on all beverage players, but it's not position of the -- it's not expectation of the industry, and it seems, based on latest communication, it's not even an expectation of the government. So we are working through this process. As in terms of the future, as soon as we know and as soon as the laws become clearer, we obviously will communicate when and then to what rate those taxes may be implemented.

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Cemal Demirtas, Ata Invest Co., Research Division - Head of Research [15]

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Okay. And do you -- about the court decision, do you expect anything in the near future? Because in Turkey, such things get -- takes longer than we think normally. Is there any certain time or possibility for this regulation? Because I think there was appeal to the court the previous decision. So do you think it's going to come clear soon?

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Andriy Avramenko, Coca-Cola Içecek Anonim Sirketi - CFO [16]

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We don't know. We work through the industry association and as part of the kind of industry representation to solve it and find the amicable solution for this. But speculating about final time of resolution, it would be premature.

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Operator [17]

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(Operator Instructions) We have a question from Douglas Turnbull, Invesco.

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Douglas Turnbull, Invesco Perpetual - Senior Analyst [18]

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Could you give us a bit of color on how the second quarter has begun for you in each region and also drill down a bit into a bit more color in the problems in Pakistan? And just an idea of what is both within and without of your control in terms of arresting that slide in volumes and margins there.

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Burak Basarir, Coca-Cola Içecek Anonim Sirketi - CEO [19]

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Douglas, unfortunately, I cannot give you any color on the second quarter. But let me try to whisper a couple of things. I mean we thought the month of April would have been a tough month, but Turkey went well, better than what we expected. Also the Ramadan will start in the month of May, so we think -- and which will help us in terms of building up our inventory that was at our customers and now the Ramadan consumer promotion will also bring some excitement for most of our region. So Central Asia is doing well. So we're not seeing any slowdown in the momentum. Turkey has done a better job than what we've expected for the month of April.

I think we're going to be seeing a recovering Iraq through the consumer promotions that are going to kick in with the Ramadan holiday season. And on Pakistan, I mean we're controlling everything that we can control in the marketplace. That's for sure because we've been gaining market share since the beginning of the year. The whole country started slowing down as you would remember, in the second half of 2018 last year after the elections, seasonal devaluation. Unfortunately, the government is not functioning as strong as it should have right now. So there are lot of noise on the street in terms of -- with the new government, I think the confidence level needs to increase. And regarding the challenges, we have both macro and some of the legislative challenges that we're facing right now in terms of additional taxes that we just mentioned. We're doing everything possibly can with our obviously franchisor Coca-Cola Company to mitigate and minimize the risk on our business and make sure that we don't lose any consumer base.

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Operator [20]

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(Operator Instructions) We have a question from [Matija Gergolet], Goldman Sachs.

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Unidentified Analyst, [21]

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I had a couple of quick questions. Further, on Pakistan, I think a couple of quarters ago, you had mentioned that there is a new competitor. So just wanted to get some idea about are they in the market already. And sort of if not, then when are they expected to launch or begin operations? And so might the problem be more structural than purely cyclical as it seems right now? And secondly, on the debt and net debt levels, could you please walk us through the FY '18 December numbers to March '18 accounting for IFRS 16 and what the changes are? Seems like net debt has gone up a bit, so just want to understand the reason behind that.

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Andriy Avramenko, Coca-Cola Içecek Anonim Sirketi - CFO [22]

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On the first question, I am not sure what you're referring to about new competition. Are you referring to our new launch or actual new competitor in the market? Because we...

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Unidentified Analyst, [23]

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Yes, I was referring to a new competitor. I think there was a -- was there a Korean bottler or South Korean bottler that had entered the Pakistan market...

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Andriy Avramenko, Coca-Cola Içecek Anonim Sirketi - CFO [24]

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Okay, okay, okay. I understand. Okay. Yes, this is a very slowly evolving situation. PepsiCo designated Lotte, Korean conglomerate, to be a consolidator of -- from what we understand, consolidator of their bottlers in Pakistan. So far, they acquired one bottler and they have 5 to go. It's all going fairly slowly. We're not sure, but it may also involve some kind of pricing or transactions related to top clients or there is a little bit of an aggressive and erratic behavior. But that's kind of -- this is not the main issue in the market. We are not particularly focused on that. It will take a few years, we believe, for them to consolidate. We're focusing on what we can control: improving outer market; reaching more outlets; controlling the market; keeping our cost down, rationalizing, and so on; and reinvest in this and growth on price, and also watching the macroeconomic environment.

The competitive environment other than difficulty of moving prices up in the market, that's pretty much the only impact that we see at this point.

Now in terms of IFRS 16, so operating leases, we brought them on the balance sheet as required from January 1. We adopted fully retrospective approach and lease liabilities of TRY 193 million and rights of use of assets of about TRY 161 million brought on the balance sheet as of March -- end of March 2019.

And if you would like to see more details about the restatement, they were explained in the footnote #2 in the financial statements. I hope this is answering the question in terms of the impact of leases on debt. If not, I think we have, again, on footnote 2, we have a full analysis of how exactly it was done. So you can see it there.

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Unidentified Analyst, [25]

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Yes. So just to be clear, other than the leases, there has been no increase in debt, right?

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Andriy Avramenko, Coca-Cola Içecek Anonim Sirketi - CFO [26]

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No, if anything, there may be like literally meaning marginal repayment, but there was no new debt -- absolutely new debt was taken on in this period.

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Operator [27]

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(Operator Instructions) We have a follow-up question from Douglas Turnbull from Invesco.

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Douglas Turnbull, Invesco Perpetual - Senior Analyst [28]

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Can I just also ask in light of a slightly weaker start to the year and especially the macroeconomic uncertainty in Pakistan, does that have any change to your CapEx plans? Because I think you're talking about 78% of revenues being sort of roughly what you're targeting to spend. Just any thoughts on how that might evolve.

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Andriy Avramenko, Coca-Cola Içecek Anonim Sirketi - CFO [29]

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We are obviously looking all the time in terms of the efficiency of the CapEx deployment. Certain CapEx is, as you can imagine, is unavoidable in terms of a -- we have been in Pakistan for a very long time, we're investing in coolers and so on. If there is a CapEx that we can delay, suspend, obviously we are looking into it. As you have seen from the comparison from the first quarter, our kind of numbers as percentage of NSR was marginally lower than the first quarter last year.

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Operator [30]

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(Operator Instructions) We have no further questions. Dear speakers, back to you for the conclusion.

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Burak Basarir, Coca-Cola Içecek Anonim Sirketi - CEO [31]

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Okay. Thank you, ladies and gentlemen, for your -- once again, your interest in our company. Obviously, first quarter was a pretty challenging first quarter and then we all knew '19 was not going to be a easy year. But as management, as a team, all of us are doing our best to make sure that we exceed the expectations in the marketplace and deliver value in every day.

So thank you for your interest and time, and hope to see you, talk to you next time. Thank you very much. Bye-bye.

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Operator [32]

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This concludes today's conference call. Thank you for your participation. You may now disconnect.