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Edited Transcript of CCOLA.IS earnings conference call or presentation 27-Feb-20 1:00pm GMT

Q4 2019 Coca-Cola Icecek AS Earnings Call

Ümraniye Ýstanbul Mar 11, 2020 (Thomson StreetEvents) -- Edited Transcript of Coca-Cola Icecek AS earnings conference call or presentation Thursday, February 27, 2020 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

* Çiçek Usakligil Özgünes

Coca-Cola Içecek Anonim Sirketi - IR & Treasury Director

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Conference Call Participants

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* Alexander Gnusarev

VTB Capital, Research Division - Equities Analyst

* Gulsen Ayaz

Deniz Yatirim Menkul Degerler A.S. - Head of Institutional Sales & Trading

* Hanzade Kilickiran

JP Morgan Chase & Co, Research Division - Analyst

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Presentation

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Operator [1]

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Ladies and gentlemen, welcome to CCI Full Year 2019 Financial Results Conference Call and Webcast. I will now hand over to your host, Ms. Çiçek Özgünes, Investor Relations and Treasury Director. Please go ahead.

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Çiçek Usakligil Özgünes, Coca-Cola Içecek Anonim Sirketi - IR & Treasury Director [2]

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Hello. Good morning, and good afternoon, ladies and gentlemen. Welcome to our fourth quarter and full year 2019 results webcast. Today, our CEO, Burak Basarir, will briefly talk about our operations and then our CFO, Andriy Avramenko, will share with you the financial review. Then Mr. Basarir will take over to walk you through our 2020 expectations. Following his closing remarks, we will start the Q&A session.

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

Now let me turn the call over to Mr. Basarir. Sir?

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

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Thank you, Çiçek. Good morning, and good afternoon, everyone, and thank you for joining us today. We are happy to report a solid performance in 2019, which was achieved by the diversification of our business, strong brand portfolio and financial discipline. I wouldn't say 2019 was an easy year, obviously, but we had to manage many challenges in most of our markets, like the weak consumer sentiment in Turkey, especially in the first half of the year, macroeconomic problems in Pakistan, security issues in Iraq and continuing convertibility issues in our Turkmenistan operations. But nevertheless, we grew our core business by 1% in 2019, while growing the number of transactions by 3%.

In line with our emphasis on revenue growth management initiatives, our revenue grew by 15% and 12% on an FX-neutral basis through balanced price increase, positive product and channel mix. EBITDA growth was higher than revenue growth with a margin expansion of 58 basis points. We reached a record high free cash flow of TRY 1.1 billion through a mix of improved profitability, disciplined balance sheet management and prudent CapEx spending.

These solid results are achieved through our strong brand portfolio, our excellence in execution and [obviously] our exceptional team on the ground.

Now I would like to move on to the Slide 5 to discuss our operating performance in more detail. In 1 sentence, I can summarize 2019 as a year where we delivered within our quality growth algorithm. The number of transactions exceeded the volume growth. Net revenue growth exceeded the number of transactions growth, which in turn resulted in margin expansion for 2019.

In the fourth quarter, our core volume grew by 2.4%, which was backed by solid growth in Turkey, Central Asia and Jordan. Net revenue growth was mainly driven by Turkey operation. And on an FX-neutral basis, our revenue growth in the fourth quarter was 14%. Fourth quarter, we saw an over 400 basis points expansion in EBITDA margin as a result of our robust gross margin expansion in international markets and in -- also in Turkey.

2019 full year performance was similar to fourth quarter where net sales revenue grew above volume and margin expansion was delivered at gross profit and EBITDA level. In 2019, we both grew our EBIT and managed to have much lower financial expenses compared to 2018 as a result of more stable Turkish lira and Turkish financial markets. Accordingly, we reported TRY 966 million of net income, growing 3x compared to 2018.

Now please move on to Page 6. If I briefly review the category performances, our Sparkling portfolio, which is the biggest in our business, 71%, grew by 4.9% in the fourth quarter of the year. Full year Sparkling growth was 0.3% despite cycling a high base of 6.8% growth in 2018. In 2019, Sparkling volume grew in all markets, except for Pakistan, Jordan and Turkmenistan.

Stills category posted a robust 14.5% growth in the fourth quarter, while growing by 5% in the full year despite cycling a high base of 11.6% of last year. The category growth was helped by strong growth of Ice Tea in all markets and also the juice category in our Central Asia operations. The water category remained almost flat in 2019 while cycling a 6% growth of 2018. Strong momentum in the on-premise channel in Turkey helped profitable volume growth.

In the fourth quarter, the water category was down by 13%. This decline was mainly due to the category contraction in our operations in Iraq, Pakistan and Turkey as well. As we announced in the mid January, we've started preliminary discussions with the Coca-Cola Company to revisit our operating model for non-ready-to-drink tea business, which is Dogadan in our portfolio. In 2018 , non-ready-to-drink tea volume was down by 5%, mainly due to pricing decisions that we made.

So let me move on to the next page, Page 7, please. We are pleased to deliver our guidance at all lines. In 2019, we benefited greatly from our geographical diversification, where softness in international markets was more than offset by the solid Turkish performance. Double-digit revenue growth and margin expansion marked the year, substantial free cash flow generation enabled us to deleverage our balance sheet delivering only onetime net debt-to-EBITDA on an FX-neutral basis.

Now please, let me move on to next slide to review the regional performances. In Turkey, which accounts for 50% of our consolidated sales volume, the fourth quarter volume was up by 5%, supported by favorable weather conditions. Excluding non-ready-to-drink tea, our volume was up by very strong robust 10%. This volume growth was supported by double digit volume growth in our main categories, both in Sparkling and Stills.

And in the full year, Turkey's sales volume grew by 1.8%. Our core volume, on the other hand, grew by 3.2%, again helped by Stills, Sparkling and also Water category. The strong volume performance in Turkey was helped by favorable tourism, addition of new accounts, successful execution in the marketplace, supported by successful consumer promotions. On-premise channel supported volume growth throughout 2019.

In the fourth quarter and overall in the year, Turkey operation delivered high-quality results. Our pricing strategy, improved package mix impact, and our focus on effective cost management helped us to deliver margin expansion in our Turkish operations.

Please move on to the next slide. All Central Asian operations performed very strongly in 2019, growing top line volume in double digits, except for our Turkmenistan operation. Kazakhstan grew sales volume by 14% in the year and 16% in the last quarter of the year, resulting in share gains. Similarly, Azerbaijan and Kyrgyzstan grew their volume by 20% and 10%, respectively, both increasing their Sparkling market shares. In Turkmenistan, production stopped due to convertibility issues, as you know, from the previous calls, and therefore Turkmenistan made a very negligible contribution to our results. Excluding Turkmenistan, from our Central Asia operations, overall growth was 17% in the fourth quarter and 14% in the full year. These strong results were achieved on the back of our continuous focus on investing in the market, strong consumer activations and again, excellence in our execution capabilities on the ground.

Let me move on to Page 10. Our Pakistan operations, macroeconomic conditions put significant pressure on the market in general and which eventually affects consumer sentiment to erode, which in return negatively impacts our sales volume which resulted in a 7.8% decline in 2019 and 15% in the last quarter. The last quarter's performance was also affected by significant destocking at distributors level. The price increase we've implemented in September through October impacted our top line volume, while improving our net sales revenue per case.

Our trademark Coca-Cola outperformed the Cola segments with the support of high brand love score, increased penetration and continued focus on improving route to market execution. As in all our markets, we continue to focus on improving our market execution and our route to market to deliver sustainable growth in our Pakistan operation.

The Middle East continued to be a challenging operating environment as well. Our volume was down by 1.7% in 2019 and 3.38% in the last quarter of the year. In Iraq, political unrest had a negative impact, especially in the fourth quarter, resulting in 5% volume decline, yet the Brand Coke grew by 6% in the year and 8% in the last quarter. This helped Sparkling category to grow by 4% in the year and 6% in the last quarter. Increase in numeric availability and increased production capacity with the addition of our new production lines in Hilla plant were the primary reasons for our 1% full year volume growth achieved in Iraq. Jordan continued to be challenging, yet in the last quarter of the year, we recorded a solid 7% growth.

Now I will hand over to Andriy to take you through financial results in more detail, then I'll take over for our 2020 guidance and answer your questions. Thank you.

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

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Thank you, Burak. Good morning, and good afternoon, everyone. Let me start with a brief summary of our financial performance. Net sales revenue grew by 11% in the last quarter of the year. The growth was driven by Turkey operation, while international operations also had a positive impact by growing 2% despite lower volumes.

For the full year, net sales revenue grew by 15% driven by strong double-digit growth in Turkey. Slowdown in Pakistan and production stoppage in Turkmenistan were the primary reasons for the relatively softer, yet still positive international performance. We are very happy to have recorded margin expansion at all lines, gross profit, EBIT and EBITDA, both in the fourth quarter and in the full year. Gross margin improvement was partially attributable to cash designation, which I will touch on in the coming slides.

Excluding the impact of cash designation, we still reported solid margin expansion on a consolidated basis. Net income was very strong at TRY 966 million, 3x of the year before. I will talk in more detail on this in the coming slides.

Moving on to Slide 13. So on our per unit case performance, our consolidated net sales revenue per unit case increased by 12% on an FX-neutral basis. Turkey, Kazakhstan and Azerbaijan were the main drivers of growth on the back of positive pricing impact. Our gross profit per unit case grew by 16%, attributable to higher gross margin in Turkey, which was supported by 21% net sales revenue per case growth and cash designation mechanism.

In the international operations, NSR per unit case on FX-neutral basis was 5% up despite challenges. On FX-neutral basis international operations, gross profitability per unit case increased by 3%. In 2019, EBIT per unit case was up by 17% mainly driven by higher profitability of Turkey.

Now moving on to Slide 14. In final quarter of the year, gross margin increased by 607 basis points to 34.7%, which was broad-based with all countries expanding their margins due to procurement savings and some by top line growth. Cash designation also had a positive impact on gross margin in Turkey. Excluding the impact of cash designation, gross margin expansion was still very strong at 462 basis points.

In Turkey, gross margin was up by 120 basis points to 34.9%, benefiting from increasing NSR per unit case and cash designations. The impact of cash designation in Turkey in the fourth quarter was 444 basis points.

In our international operations, gross margins improved by 983 basis points to 34.5%, which was mostly attributable to lower cost of procurement as a percentage of NSR in Pakistan, Kazakhstan and Iraq. This was achieved despite lack of Turkmenistan's contribution due to production stoppage.

Consolidated EBITDA margin was up by 416 basis points to 12.1% in the fourth quarter 2019. Turkey operation's EBITDA margin, excluding other income expense, improved by 263 basis points to 4.3% and international EBITDA, again excluding other income expense improved by 602 basis points to 16.3% reflecting higher profitability. Taking out the impact of cash designation, EBITDA margin improvement was 270 basis points.

Please now move into Slide 15. We recorded TRY 966 million net income in 2019, 3x of the net income we recorded in 2018. EBIT as well as lower FX losses and financial expenses compared to 2018 due to stabilization of Turkish lira and Turkish financial markets.

Let's move to Slide 16. Our net debt was USD 431 million by the end of 2019, down from USD 531 million a year ago. Please note that net debt also reflects the impact of operating leases, which started to be recorded on the balance sheet within the context of IFRS 16, effective from January 2019.

Looking at the composition of our debt, 68% is in U.S. dollars and 18% in Europe. Here, we have couple of strong mitigants. First of all, we hold a large FX cash balance, which was 59% of our cash by the end of 2019. Second, we have hedges in place in the form of cross-currency swap and forward transaction. Third one is the above 3 years average maturity we have, which would give us enough time to pass on the impact of any devaluation onto our prices. And last but not the least, our net leverage is very low, almost equal to our EBITDA, which provides us comfort and flexibility.

Moving on to Slide 17. After cycling a heavy investment growth, we have been generating strong free cash flow since 2016, but 2019 was especially strong, exceeding TRY 1 billion. The solid free cash flow was the result of couple of different things. CapEx spending was prudent, necessary CapEx was not neglected, but managed carefully ending with only 6% of net sales revenues. But the improvement in free cash flow didn't only come from lower spending, but also improved profitability, where our EBITDA grew by 19% and also strict balance sheet management, which resulted in a decline of our net working capital to sales ratio to 4%.

Now I'm leaving the floor for Burak for 2020 guidance.

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

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Okay. Thank you, Andriy. After reporting a very solid and high-quality results in 2019, our commitment is intact to build on top of this with the continuous focus on portfolio architectures, continuously improving our market execution and improving our route to market while maintaining our financial discipline.

After cycling a strong year, we expect Turkey volume to be flattish, yet the number of transaction is expected to be higher than the overall unit case volume. As I noted earlier, Central Asia reported a very good year with a double-digit growth rate. Cycling this, we expect some moderation in volumes in Central Asia, yet still strong. Pakistan should get back to growth mode and should the Middle East. Therefore, we expect the mid-single-digit growth in our international markets with positive contribution across the world.

Price increases and revenue growth management should result in our net sales revenue to exceed that of volume, delivering between 15% to 18% growth on an FX-neutral and consolidated basis. As Andriy explained earlier, we stopped cash designation by the beginning of the year. Although there is no significant change in the net income level, it makes some difference above the EBIT line.

Our OpEx management initiatives, mix architecture and price increases should mitigate the impact of termination of cash designation to a large extent. Without cash designation, we expect around 100 basis points improvement in EBITDA margin. We expect our CapEx to sales ratio to remain at 6% to 8% levels, where our CapEx will mostly go into the marketing, digital and maintenance spendings.

We're now, I think, ready to take your questions. So we can open up the floor for questions. Thank you.

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Questions and Answers

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Operator [1]

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(Operator Instructions) The first question comes from Alexander Gnusarev from ETB (sic) [VTB] Capital.

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Alexander Gnusarev, VTB Capital, Research Division - Equities Analyst [2]

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I just wanted to ask a couple of questions. I'll ask them one by one. The first question in regards to macro. What are your expectations for Kazakhstan and Pakistan in the next year?

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

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I mean, regarding the Kazakhstan, we're not expecting anything negative, or we're not expecting any further headwinds in Kazakhstan operation. So I think we're going to be delivering a good quality growth in our Kazakhstan operation. In Pakistan, I think the -- again, this is an emerging market we're talking about. But I feel like -- and those are the signals from the ground that diverses somehow behind us. But again, because of the seasonality, we need to cross our fingers that we keep the same momentum in the high season, but the signals are good right now for Pakistan as well.

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Alexander Gnusarev, VTB Capital, Research Division - Equities Analyst [4]

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Okay. Are you considering an expansion to any new markets?

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

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Well, I mean, as a policy, as a strategy for our company, we are always looking for new opportunities to expand our footprint as long as it makes sense for our shareholders. So we're not in a mood to expand for an expansion sake. We are continuously in contact with the Coca-Cola Company. So if anything significant comes up, we will obviously raise our voice and show our interest, if it makes sense, again, for our shareholders.

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Alexander Gnusarev, VTB Capital, Research Division - Equities Analyst [6]

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Okay. And the last question from my side. If you could comment on that, what is the approximate impact of this cash designation on your EBITDA margin in 2020? I mean for -- approximately for how much bps it's going to contract?

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

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Okay. As you can see on the Slide 14, the impact on the consolidated numbers on EBITDA was approximately 2%, right? So that's -- so this is the difference we are talking about. And we are planning an improvement of 100 basis points, excluding cash designation. So the math is there, right?

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Alexander Gnusarev, VTB Capital, Research Division - Equities Analyst [8]

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Yes, yes. But I was just wondering you also wrote a footnote that result -- that it will be declining slightly on a reported basis -- because if you take into account -- this [designation] looks like 100 basis points decline if you take it into account or not.

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Andriy Avramenko, Coca-Cola Içecek Anonim Sirketi - CFO [9]

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This is our prudent estimate, right? We have a 200 basis point difference, and we plan to improve it by at least 100 basis points. So yes, that is the calculation.

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Operator [10]

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The next question comes from Hanzade Kilickiran from JPMorgan.

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Hanzade Kilickiran, JP Morgan Chase & Co, Research Division - Analyst [11]

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I have 2 questions. The first one is related to your revenue outlook. You are guiding strong revenue on FX-neutral basis, like 15% to 18%, with small volume growth 3% to 5%. So I understand you look for strong pricing in 2020 or do you expect a product mix change in 2020 because your pricing seems to be over the inflation in 2020? I'm trying to understand the strategy here. And the second question is, you observed some margin improvement in 2019, when you exclude the impact of the cash designation. Is this a real margin improvement? Or is this coming because of the decline in a low-margin market, Pakistan?

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Andriy Avramenko, Coca-Cola Içecek Anonim Sirketi - CFO [12]

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This is Andriy. First, on the pricing. Obviously, the expansion of 15% to 18% NSR on 3% to 4% volume growth implies both pricing and mix. We do plan to take pricing in 2020 in various markets. If you look at our historical pricing, we are not particularly expensive compared with our peers per case. So we do believe that there is an upside in our pricing, but also mix will play a role in our improvement of 15% to 18% range. This is to the first question.

To the second question, margin improvement. If we exclude cash designation, obviously, it's a real improvement in the margins. There is nothing else to extract from there to make it more real than they already are in this case. So yes, we have said -- yes, Pakistan is not a particularly -- no, the Pakistan mix reduction is so negligible in terms of the total volume that it doesn't play a significant role in the mix -- in the impact on margin. You see the real margin improvement.

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Hanzade Kilickiran, JP Morgan Chase & Co, Research Division - Analyst [13]

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So there are some cost saving (inaudible) pricing in 2019?

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

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Yes. It was both due to pricing in our largest markets like Turkey and Kazakhstan and so on as well as real cost savings. Actually, we had procurement savings in every market we operate.

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Hanzade Kilickiran, JP Morgan Chase & Co, Research Division - Analyst [15]

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Can I also ask one more stuff? I mean you mentioned that you will continue on your strong pricing in 2019. So I'm trying to understand do you think that Pakistan market will, I mean, allow you to increase prices further without losing more volume next -- I mean, this year, because this is a very big market for your overall consolidated volume. So I just -- I would like to understand upside or downside based on the revenue here?

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

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Yes. I think we talked about it before that we took pricing in -- at the end of third quarter, beginning of the fourth quarter and in 2019. We are maintaining this level of pricing and are committed and see that we can maintain despite of the competitive dynamics, and we have -- on that basis, we have outlook that our volume dynamic will be positive despite the price level we achieved.

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Operator [17]

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(Operator Instructions) The next question comes from Alexander Gnusarev from ETB (sic) [VTB] Capital.

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Alexander Gnusarev, VTB Capital, Research Division - Equities Analyst [18]

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Yes. Just a clarification question from my side. So as you said, I see that this cash designation impact in 2020 is similar to 2019, like you said, 200 basis points. Did I get it right? Or you were referring to 2019?

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Andriy Avramenko, Coca-Cola Içecek Anonim Sirketi - CFO [19]

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Yes. The 2% cash designation impact is 2019. Obviously, we don't give the guidance, precise calculations on the cash designation impact, that this will depend -- this will be very hypothetical and depends on -- also on the currency markets and so on. But what we said that the -- excluding cash designation, how we target margins to improve by 100 basis points, excluding cash designation in a base calculated in 2019.

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Alexander Gnusarev, VTB Capital, Research Division - Equities Analyst [20]

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Okay, that's perfect. And just one follow-up question from my side, if I may. On your net debt-to-EBITDA development, could you perhaps provide some clearance. How is it going to progress? You're going to lower it further below 1?

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Andriy Avramenko, Coca-Cola Içecek Anonim Sirketi - CFO [21]

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Net-debt-to-EBITDA?

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Alexander Gnusarev, VTB Capital, Research Division - Equities Analyst [22]

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Yes.

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Andriy Avramenko, Coca-Cola Içecek Anonim Sirketi - CFO [23]

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I mean we will be at or below 1, short of any other developments, right? So we'll continue with lower leverage.

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Operator [24]

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The next question comes from Hanzade Kilickiran from JPMorgan.

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Hanzade Kilickiran, JP Morgan Chase & Co, Research Division - Analyst [25]

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Sorry, I forgot to ask about the Tea business. You mentioned that you are negotiating with the Coca-Cola Company about the sales structure, I think. I mean what is the plan here? Are you planning to exit from this business? Or you are going to -- you are trying to get the control of the production of this business?

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

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Yes. The negotiations are ongoing, and there may be various outcomes of that negotiation. One of those outcomes could be that we will exit this business. But as you know, this business is financially negligible to our attritions. So it should not make a big difference. But for the comparability and convenience of everyone, we started showing our numbers, excluding distribution of the non-ready-to-drink tea Dogadan.

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Hanzade Kilickiran, JP Morgan Chase & Co, Research Division - Analyst [27]

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So an exit will provide probably a good volume trend, right, because tea business has been declining recently in [Dogadan] as far as I remember.

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Andriy Avramenko, Coca-Cola Içecek Anonim Sirketi - CFO [28]

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Yes. I wouldn't speculate about that. The Dogadan volume, it's a super-premium or premium non-ready-to-drink tea. It's a kind of marginal premium player as a brand. So from that perspective, their volume is significantly dependent on what other participants do, such as the largest player, who when and they choose to hold prices low, it has impact on the entire market. So there is a very strong market price dependency and volume that Dogadan sells. So it will be difficult to predict how it would have affected us if we dropped the Dogadan volume, but the volume is significant. And while the profitability contribution is negligible, right? And that's why we are disclosing the total volumes that we are selling and basically leaving you that financially it's a negligible business for us.

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Operator [29]

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(Operator Instructions) The next question comes from Gulsen Ayaz from Deniz Invest.

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Gulsen Ayaz, Deniz Yatirim Menkul Degerler A.S. - Head of Institutional Sales & Trading [30]

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I have 2. One of them is on Turkish market. You have got a very strong volume growth on No Sugar category. And I was wondering whether this was a one-off or some strategy change in what particularly drives that strong growth? And do we see similar trends in the first quarter of this year?

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

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Gulsen, I mean, as you know, the sugar-free mix within our total portfolio, it is still very small. So whenever an organization like ours focus on a single brand, obviously, the percentage volume growth is significant. But when you look at the overall absolute volume, it's still small. I mean the team is already aware to make sure we execute the same quality (technical difficulty) availability across all of our Coke products and (inaudible) what we're doing. I don't think it's one-off. We're basically building the base. Obviously, going forward, the growth rates will be smaller because the base will increase. So there wasn't anything specific other (inaudible).

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Gulsen Ayaz, Deniz Yatirim Menkul Degerler A.S. - Head of Institutional Sales & Trading [32]

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Okay. Can you remind me, is this a higher-margin product for you? Or is it the same margin with the regular Coke?

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Burak Basarir, Coca-Cola Içecek Anonim Sirketi - CEO [33]

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I mean sugar-free has a little higher margin because you don't put sugar in it, but the concentrate prices are different, obviously. So the net-net contribution on the margin, there is almost equal, but Coke Zero would be slightly high-ish in terms of margin.

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Gulsen Ayaz, Deniz Yatirim Menkul Degerler A.S. - Head of Institutional Sales & Trading [34]

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Okay. Okay. And the second question is on the Pakistan market. You've taken some pricing action there, and I was wondering how the consumer is now reacting to that. Are they getting used to the new pricing level?

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Burak Basarir, Coca-Cola Içecek Anonim Sirketi - CEO [35]

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Yes, they are. I mean it's -- obviously, we're not the only company taking price. The challenge was, basically, we are #2 in the Pakistan market. So obviously, we had to check with our competition. Again, being the #1 in the Cola segment, but competition has on the overall Sparkling market share is the #1. The competition following and the -- we've not seen any negative reaction on the consumer side.

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Gulsen Ayaz, Deniz Yatirim Menkul Degerler A.S. - Head of Institutional Sales & Trading [36]

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Okay. And one last question maybe on your Turkey volume guidance. This 30-ish number, obviously, I mean, we had a very mild winter in the fourth quarter. And I think this is going to be the trend more or less from now on, which means a longer summer season for you. So do you think your guidance is a little bit conservative?

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Burak Basarir, Coca-Cola Içecek Anonim Sirketi - CEO [37]

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I'm hoping that you're right. Let's see what happens. So I mean, I don't want to overpromise and under-deliver, obviously. But let's see. I mean it's -- when you look at the things, how are they evolving in Turkey right now, we're taking a little price increase, a little bit over the inflation. So let us see how the consumers will react to our pricing decision and the shelf price and et cetera. You might be right. Obviously, that's going to be our target to over-deliver on our guidance. But as I said, I wouldn't want to be delivering less than what we are promising actually.

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Operator [38]

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(Operator Instructions) There are no further questions. Dear speakers, back to you for the conclusion remarks. Thank you.

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Burak Basarir, Coca-Cola Içecek Anonim Sirketi - CEO [39]

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Well, thank you very much, ladies and gentlemen, for joining our call today. And we appreciate -- we always appreciate your support to our company. And we will keep our promises for 2020 as well. And I think 2020 will be another great year for our company. So hope to see you on some of the meetings or on the next call. Thank you very much. Have a nice day. Thanks.

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Operator [40]

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