Anadolu Efes Birack Ord

Good morning and good afternoon, ladies and gentlemen. Welcome to Anadolu FSC's last quarter 2025 financial results conference call and webcast. I'm Asli Demirel. I'm the Investor Relations and Risk Management Director of Anadolu FSC. Our presenters today are CEO Mr. Onur Alçuk and our CFO Ms. Sinan Saman Çayı Rezmes. The first part of today's call will be in listen-only mode. Afterwards, we will open the floor for a Q&A session. You may submit your questions at any time using the question box on your screen. Unless explicitly stated otherwise, all financial information disclosed in this presentation are presented in accordance with PAS 29. 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 Alçuk, Anadolu FSS CEO. Sir.

Thank you, Aslı. Good morning and good afternoon, everyone, and welcome to Anadolu FSS' full year 2025 operational and financial results conference call. Before we begin, I am delighted to welcome our new CFO, Yasemin Çelezmez, who is with us today for her first results call in her new role. 2025 was a year in which we delivered a mixed set of results in a complex and evolving operating environment, but we continued our disciplined execution across our markets. On a pro forma basis, we delivered consolidated volume growth of 7% in full year 2025 and 5% in the last quarter of the year. The year group recorded a flat volume performance on a pro forma basis in full year 2025, as a softer domestic performance was offset by international operations. Supported by solid volume performance and timely pricing actions as well as tight discount control, we achieved a healthy topline at 244 billion TL in 2025. In the last quarter, our EBITDA performance was supported by gross profit improvement and a reduction in our OPEX margin, reflecting our continued focus on strict cost discipline. However, our EBITDA recorded as a slight decline around 2% year-on-year on a pro forma basis to 40.5 billion TL in 2025 with 17% margin. Our consolidated net loss was recorded around 3 billion TL in the last quarter. Despite stronger operator profitability in the quarter and lower financial expenses compared to last year, Net income was negatively impacted by lower monetary gains and tax adjustments, which in the following section Yasemin will cover the impact in more details. Yet, we were able to deliver a strong net income of 9 billion TL for the full year. Free cash flow was negative both in fourth quarter and the full year. It was pressurized by weaker operational profitability. Higher interest expense payments as a result of a very high interest rates compared to previous year. Yet, there was an improvement year on year thanks to prudent capex spending and lower tax payments. Consequently, our consolidated net debt to EBITDA ratios stood at level of 1.4 times as of December 31, 2025, still at a healthy level. Finally, I am pleased to announce our dividend proposal of 0.34 TL per share. which is a testament of our commitment to delivering value to our shareholders. Looking more closely at our beer operations, diversification across markets was a key factor, supporting volume stability in 2025. In the fourth quarter, consolidated beer volumes reached 2.7 million hectolitre, increasing by 0.6% year-on-year, with the contribution of all operations, with the exception of Georgia. For the full year, Consolidated beer volumes were 13 million hectometer, broadly parallel to 2024 on a pro forma basis. Turkey beer volumes declined by 1.1%, while international beer volumes increased by 0.8%, highlighting the balancing effect of our geographic footprint. As shown in the volume breakdown of our beer group operations, in 2025, Turkey remains our largest contributor, while our international markets particularly continue to support overall volume performance. Looking at our Türkiye bir operations, we delivered 1.4 million hectolitre volume in the fourth quarter, up 0.4% versus last year. For the full year, volume reached 2.6 million hectolitres, representing a 1% decline year on year, broadly in line with our expectations. High base impact following growth for several years, persistent inflationary environment and less supportive tourism season weighed on domestic volume performance. Despite these headwinds, we continued to invest our portfolio through diversification by launching our new premium brand Stella Artois. In a market where we clearly observe increasing premiumization, we believe Stella Artois is well positioned to meet evolving consumer needs and expectations. Additionally, in the second half of 2025, we started a distribution of rakı, Turkish nature spirits, in line with our ambition to strengthen our presence in the distilled spirit category. We are still in the process of buying 60% of tarish üzüm, which I believe you will hear from us the developments in a near future. Let me briefly touch on our international beer operations. where our volume performance was resilient throughout the year. Starting with Kazakhstan, we were pleased to see the market stabilization after a few years of contraction. In line with market, as a clear market leader, we achieved to record a slight increase supported by low single digit volume growth in last quarter of the year. This performance was supported by improved promotional activities, as well as marketing campaigns, together with our continued focus on the CAC segments, while a solid contribution also came from our export business. 2025 was also a strong year in terms of portfolio diversification, supported by successful launches, including Burçka Sivercova 0.0, and Wukong Zhu, our new products, addressing the changing preferences of consumers. Turning to Moldova, despite cycling a very strong low teens growth in 2024, full year volumes delivered low to mid single digits growth in 2025, which is supported by low single digit volume growth in the fourth quarter. Throughout the year, affordability pressures remained a key challenge for the market, which is managed by our well-balanced brand portfolio, combined with targeted marketing campaigns and consumer activations. In Moldova, we also introduced one of EFES' most popular premium brands, Stariman Ligiz Boçenka, to the market this year. Additionally, as part of our continuous efforts on the premiumization, we also introduced the premium brand Spaten to the market. Finally, Georgia Volumes declined mid to high teens in the fourth quarter and mid single legit for the full year, mainly reflecting the restructuring of our export operations from Georgia. Some of our export operations are doing local production and paying royalty fees to our Georgian operation. Therefore, as previously communicated, although restructuring led to a lower volume, it does not have an impact on profitability. It is also worth to mention that this impact will continue to weigh on volumes in 2026. We continued to invest in keg business in Georgia, where there is an ongoing expansion on trade channel. The negative impact of restructuring was partially offset by our positive momentum in keg channel, as well as premium segment. Regarding our soft drinks business, we CCI delivered a solid performance in 2025. Consolidated volume grew by 5% in the fourth quarter and increased by 8% for the full year. Central Asia was the key growth engine, with Uzbekistan, Kazakhstan leading the growth. In Turkey, volumes declined by 1%, as a result of a deliberate choice to optimize portfolio, since water category has relatively lower value contribution. Excluding water, Turkey delivered 3.8% year-on-year volume growth, confirming the underlying strength of the core categories. International operations volume grew by 13.5%. Solid growth performance was supported across markets with Central Asia, posting robust double-digit growth. Pakistan volumes increased by 1.3%, while Kazakhstan, Uzbekistan and Iraq delivered a robust growth of 15.5%, 33.7% and 12% respectively. Let me hand over to Yasemin to review the financials now.

Good morning and good afternoon, everyone. Let me start by reminding that all figures I refer to are on a pro forma basis, excluding Russian operations to ensure comparability with this year. Unless otherwise stated, financials are presented in accordance with TAS 29. In the last quarter of 2025, revenue increased by 10.9% year-on-year to 11.1 billion TL, yielding full-year revenue of 51 billion TL. On the other hand, gross profit declined by 4.6%, resulting in margin contraction of 680 basis points. This was the result of last year's low-cost phase related to very low hedge levels in aluminum costs in Turkey beer operations. Coming to EBITDA. EBITDA declined by 42.2% to 649 million TL in the quarter, corresponding to 537 basis point margin contraction. Decline in gross profitability was reflected on the EBITDA and this was partially mitigated by strict OPEX control, particularly in the last quarter. As seen on the bridge, there has been no increase in OPEX in the last quarter and there are even savings in OPEX in full year. For full year 2025, beer group EBITDA reached to 7.3 billion TL with a margin of 13.4%, which is down 209 basis points year on year. On the cash flow side, beer group free cash flow was 834 million TL in the fourth quarter of 2025, thanks to the improvements in working capital as well as low interest expense and taxes. In the full year, there was a year-on-year decline in free cash flow, mainly driven by software bureau operational profitability together with the higher interest payments. Yet, thanks to our efforts to improve working capital, there was improvement both on working capital and capex spending. Going forward, improving free cash flow generations remains our top priority going into 2026. For analysis purpose, if we look at the numbers excluding TS29 effects, underlying operational performance is materially stronger both at consolidated and peer group levels. More specifically, on a TS-29 excluded basis at peer group level, revenue would have been 52.6 billion TL compared to 54.3 billion TL under TS-79. EBITDA would have been 10.3 billion TL compared to 7.3 billion as reported. Accordingly, EBITDA margin would have been 19.6% compared to 13.4% under TS-79. With respect to debt and cash and debt management, as of end of 2025, consolidated net debt to EBITDA stood at 1.4, while excluding TS-79 effects. This ratio improves to 1.2. At the beer group levels, net debt to EBITDA was reported at 4, while excluding TS-29, it was 2.8. From the balance sheet perspective, gross debt at beer group levels stands at approximately 0.9%. billion USD with average maturity of 1.7 years, while 67% of gross debt is in hard currency. Our cash position is 0.2 billion USD with 34% held in hard currency and 24% in eurozone currencies. As regards to risk management, for 2026, we already had 47% our aluminum exposure for Turkey and CES at 2,929 USD. In Turkey, 57% of our FX exposure has been had at an USD exchange rate of 47, while total FX exposure of peer group represents approximately 19% of cost of goods sold plus operating expenditures. Coming to the end of the presentation, I would like to underline that, despite all the headwinds, we close 2025 with a stable top-line momentum, as well as controlled costs and expense structure. For 2026, our priority is to restore positive free cash flow, maintain margin stability through disciplined cost control, and improve working capital for sure. Thank you. Now, I will hand it back for Q&A.