Anadolu Efes Birack Ord

Ladies and gentlemen, welcome to Anadolu Efes Pool Year 2024 Financial Results Conference Call and Webcast. My name is Aslı Demirel. I'm the Investor Relations and Risk Management Director of Anadolu Efes. Our presenters today, Mr. Onur Alçuk, the CEO, and Mr. Gökçe Yanaşmayan, the CFO. All participants will be in a listen-only mode during the first part of this call. Following this, there will be a Q&A session where you can submit your questions using the question box on the web screen. If you have questions, we kindly ask you to write them down before the Q&A session begins. Unless explicitly stated otherwise, all financial information disclosed in this presentation are presented in accordance with the inflation accounting. Just to remind you, this conference call is being recorded and the link will be available online. Before we start, I would kindly request you to refer to our notes in our presentation regarding forward-looking statements. Now, I'm leaving the ground to Mr. Onur Alturk, Anadolu EFES CEO.

Also, thank you. Good morning and good afternoon, everyone, and welcome to Anadolu EFES full year 2024 operational and financial results conference call. For 2024, it has been a year of navigating a dynamic operational environment while maintaining our resilience and focus on sustainable growth. And let me take you through some of the key highlights of our performance. So we delivered consolidated volume growth of 0.9% in the full year 2024 and strengthening our leadership position by leveraging brand strength and portfolio excellence. Through a well-balanced and diverse product mix, we have not only sustained but further strengthened our market's position. Our strategic pricing efforts and cost efficiency measures contributed to solid growth profitability. While the operating environment remains challenging in 2024, our ability to derive profitable growth has been a key highlight. However, the impact of our strong gross profitability was partially offset at the EBITDA level due to higher OTEX per hectometer. As of the end of 24, our consolidated net debt to EBITDA ratio remained below one times in line with 2023. We successfully closed the year with a net debt to EBITDA ratio of 0.6 times within our targeted leverage range. we once again achieved a net cash position in our beer group this quarter. Finally, I'm also pleased to announce our dividend proposal of 1.27 Turkish Lira per share, which is a testament of our commitment to delivering value to our shareholders. Looking into details of beer operations, 2024 has been another year of strong momentum in our beer operations actually, marking seven consecutive quarters of growth. Consolidated beer volume grew by 9.9% in the last quarter of the year and 8.4% in 2024, reflecting our consistent strong performance across all periods of this year. This solid momentum has been driven by our solid portfolio strength, of course. While Turkey's beer volume increased by 2.3%, our international beer volume grew by 9.7%. Russia continued its strong performance and registered low teens growth. On the other hand, CIS countries recorded a decline in total volumes by low single digits, mainly impacted by softer volumes in Kazakhstan. When we look at our Russian business, Russian corporations delivered strong growth throughout 2024 with low teens growth in both fourth quarter and the full year. I want to emphasize that this performance was achieved despite capacity constraints and a highly competitive environment driven by strong market demands. Our growth was driven by several key factors like increased consumer interest as more people return to their home countries, innovative new product offerings, rising household incomes and shift from spirits to beer category. Additionally, higher disposable income further increased demand for premium craft and mainstream beer choices leading to profitable growth across all segments and categories except the value segments. We have successfully maintained our market leadership in both volume and value share. Continued to drive volume growth, further strengthening its position as the number one beer brand in Russia. Moving on to Kazakhstan, as in previous quarters, volume declined in the fourth quarter as well. However, the decline was much more limited this time compared to earlier in the year. Kazakhstan's challenges during the year were mainly due to severe floods in the first half of the year and rising costs of living in the country, all of which put pressure on consumer demands. Additionally, the return of Russian citizens to their home countries also impacted the number of consumers. Despite these challenges, our performance outpaced the market across all channels, and our market share reached 48%. Furthermore, we introduced several new products, including Bolshoi Praga Can for modern trades, Sibirsky Medved for keg, and Praga Unfiltered keg for Pegas and Diot channels. Moving on to Georgia, in 2024, Georgia's beer market grew by low single digits, supported by several key factors like economic expansion, increased tourism, and major sport events, and all contributed to the market's overall growth. We reinforced our leadership by increasing our market share in Georgia as well. To strengthen our portfolio, we launched a selection of new products, including BEX, TAATI Craftline, and Alphamurao, providing a diverse range of consumer preferences. Additionally, our local brands, Nataktari and Karva, delivered strong performance, further driving our growth in the markets. When we moved to Moldova, where we had another strong year in 2024, Moldova beer market grew by lot in 2024. We outpaced the market, delivering double digit growth, supported by favorable pricing environment and portfolio diversification. At FS Moldova, we actually remained committed to investing in our brands as well, with a strong focus on both core and premium segments. Through strategic marketing campaigns, impactful brand activations, and continuous product innovation, we strengthened our connection with our consumers. 2024 has been a year of growth and expansion with successful new product launches that further solidified on the EFES market leadership. These launches include Popcorn Crowd Whole Beer, EFES Blanche Cake, and Radlar Mango, and our local champion Kishinau brand remained Moldova's strongest brand. Turning to our business in Turkey, in 2024, Turkey maintained strong momentum, delivering 2.3% growth in full year 2024, with total volume reaching more than 6 million hectolitres. While we faced a high base from last year and ongoing inflationary pressures in the markets, our highly diversified portfolio enabled us to effectively navigate these challenges and address all consumer segments. One of our most exciting initiatives this year was expanding our business into spirits and launch of FS House, our craft line in December. To meet the growing interest in the craft beers and make the already popular FS Zinniq Aperisi draft beers more accessible to our consumers, we introduced FS House brands with four extensions, including Naipa, Rye IPA, and Weizenbock variants.

Let us briefly provide some color on soft drink operations as well.