Anadolu Efes Birclk S/Adr

Ladies and gentlemen, welcome to Anadolu Efes' 9M2026 Financial Results Conference call and webcast. I'm Asli Demirel. I'm together with our presenters today, our CEO and CFO. 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. However, we kindly encourage you to do so before the Q&A session begins to ensure we have enough time to review and address them. Unless explicitly stated otherwise, all information disclosed in this presentation are presented in accordance with TAS 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 Alturk, Anadolu Efes CEO.

Thank you, Asli. Good morning and good afternoon, everyone, and welcome to Anadolu Efes' 9th month to 2026 Results Conference Call. At Anolu Efes, while our international operations continued to build on their strong momentum and remained the key road driver of the business, consumer demand in Turkey remained weak across both beer and soft drinks. So, we faced a more challenging operating environment in third quarter, which is typically the strongest season of the year. Even under these conditions, we achieved to deliver a solid 7% volume growth, reaching 33 million hectolitres on the Adolu Efes consolidated basis. This performance was mainly driven by our soft drinks and international beer operations. Despite the solid volume growth, revenue per hectolitre came under pressure due to our affordability-focused approach. In soft drinks operations and relatively higher discounting levels in Türkiye beer operations. So consolidated net revenue remained broadly flat, reaching 89 billion TL in the quarter. On the profitability slides, weaker gross profitability remained the key advent. Lower volumes and reduced operating leverage in Türkiye beer operations, together with ongoing cost inflation across both business lines, Weighed on profitability. As a result, consolidated EBITDA declined to 17 billion TL while the profitability margin contracted by 361 basis points. In third quarter, cash generation, on the other hand, improved meaningfully in both our business segments. Free cash flow reached 16.5 billion TL on a consolidated basis, representing a 35% increase versus last year. Supported by contributions from both business lines, this strong cash generation, together with our disciplined balance sheet management, allowed us to maintain a healthy net debt to EBITDA ratio of 0.9 times. As previously announced, with the Toll Filling Agreement in the second quarter, production in Uzbekistan officially started in September, marking another important step in strengthening our international footprint. Finally, with the peak summer season now behind us and a greater visibility on full year trends, we revised our full year 26 guidance to reflect the latest operating developments across our markets. I will provide more details on these revisions later in the presentation. As I said, Turkish beer business continued to operate under significant pressure during the third quarter. Nevertheless, our International operations once again demonstrated their resilience and remained the key performance driver for the beer group. As a result, beer group volume reached 3.7 million hectolitres in the third quarter, representing a decline of 5.6% year-on-year basis. While Turkey volumes declined by 14%, international beer volumes increased by 2% year-on-year to 2.1 million hectolitres Delivering another quarter of growth. More importantly, excluding the impact of the export business that was restructured in Georgia, international beer volumes grew by 6%. As a consumer preference continues to shift across markets, our broad brand portfolio allows us to participate in various price segments and consumption occasions, supporting both growth and market share development. At the same time, targeted commercial initiatives across our key markets continue to deliver tangible results. Overall, the continued momentum of the international operations once again helped partially offset the challenges in Turkey and reinforced the importance of our geographically diversified business model. Let me now turn to our Türkiye BİR operations, where the challenging operating environment that we have been discussing since the beginning of the year continues. to persist and become even more pronounced during third quarter. As we highlighted in the previous quarters, the ongoing erosion in consumers' purchasing power has continued to limit discretionary spending and increase price sensitivity across the markets. In addition, softer tourism activity and lower hotel occupancy rates added further pressure on the Horeca channel during the quarter. Against this backdrop, our volumes declined by 14% year-on-year to 1.6 million hectolitres, significantly below our initial expectations of course. We saw some improvements in the volume trends during July, which helped limit the overall decline for the quarter and provided an encouraging signal regarding the consumer activity. Unfortunately, this improvement proved temporary. August marked the weakest monthly performance we have seen in more than a decade, followed by an exceptionally weak September, highlighting the persistent pressure on consumer demand. Let me now provide some color on the performance of our international beer operations, which continued to be a key contributor to beer group performance and demonstrated resilience across our markets. In Kazakhstan, we delivered another solid quarter, recording mid-single-digit volume growth, marking our sixth consecutive quarter of expansion and reaching a record market share of 51.1% during the quarter. This performance once again allowed us to outperform the market and further strengthen our leadership position in Kazakhstan. We are particularly encouraged by the strong consumer response to our recent innovations, Hay-Z, and the limited edition launches like Miller Lime. Their meaningful contribution to volume growth reinforces our confidence in the innovation-led growth strategy and demonstrates our ability to continuously evolve the portfolio in line with consumer preferences. Combined with strong commercial execution and continuous premiumization efforts, these initiatives supported both volume growth and further expansion of our premium segment, strengthening the quality of growth. In Georgia, volumes remained under pressure due to the export business restructuring in Russia as mentioned before, as well as temporary logistical changes affecting export operations. However, solid domestic demand helped to offset part of these headwinds. As a result, reported volumes declined by low 20s while excluding the restructuring. In fact, the volume decline was limited to low single digits. During the quarter, we continued to advance our premiumization agenda through new packaging launches for Taati and Stella Artois, while further strengthening our positions in the CAG segment. In Moldova, volume performance rebounded during the quarter and returned to growth. Our affordability-focused strategy continued to support volume performance, while we further strengthened our premium portfolio through the successful launch of Starimendi. The consumer response to the brand has been very encouraging, giving us the confidence in its long-term potential. To build on this success, we launched Starymenlik in Cannes packaging form in third quarter, which we believe will further support volume growth and strengthen the quality of our growth going forward. Turning to our soft drinks business, our soft drink business diversified footprint once again. proved its strength in the third quarter, with robust international growth more than offsetting the softer market conditions in Turkey. Consolidated volumes increased by 8%, supported by 13% growth in our international operations. While consumer purchasing power pressures continue to weigh on demand in Turkey, resulting in a slight volume decline of around 1%, our revenue growth management and mix optimization initiatives continue to support International operations growth was outstanding, building on an already strong base from last year. Pakistan and Uzbekistan remained the key growth drivers, delivering volume growth of 24% and 20% respectively, while Kazakhstan maintained positive momentum and Iraq remained broadly stable. With the overview of our operating performance, let me now hand over to Yasemin who will take you through our financial results in more detail.

Thank you Onur. Good morning and good afternoon everyone. As Onur has already covered Andolfe's financial performance, I will focus on providing further information about Bir Group's financial results for the third quarter and the first nine months of the year. Starting with revenue, BIR Group's net sales declined by 5.1% year-on-year to 19.3 billion TL in the third quarter. As in the previous quarter, our financial performance reflected varying dynamics between our Turkey and international operations. While our international business continued to deliver solid growth, the significantly weaker volume performance in Turkey remained the main factor weighing our on top line. In Turkey, beer sales revenue declined by 14.5% to 10.7 billion TL, primarily reflecting the 14.3% contraction in sales volumes. Although the price increase implemented in July, together with a more favorable product mix with a shift to more premium products, as well as lower sales of low-priced products, provided some support to revenue per hectolitre performance. However, these were not sufficient to compensate for substantial decline in volume. Furthermore, we maintained a high level of discounts to support consumer affordability in an increasingly challenging demand environment. This inevitably put additional pressure on net revenue generation, particularly during traditionally our most important quarter of the year. Turning to our international operations, revenue increased by a strong 10.4% year-on-year to 8.5 billion TL, once again demonstrating the resilience of our geographically diversified business. Kazakhstan remained the strongest contributor to this performance, supported by disciplined pricing, effective revenue growth management and continued criminalization. Revenue productivity increased by approximately 20%, Turkish Lira terms, also benefiting from appreciation of Kazakh Tenge. Moldova also contributed positively to international revenue growth, while Georgia's performance continued to reflect the impact of the ongoing export business restructuring. As a result, beer group revenue for the first nine months of the year reached to 50.4 billion TL, representing a 6.2% decline year-on-year. Moving to gross profitability, Bir Group gross profit declined by 10.8% to 9 billion TL in the third quarter, with a gross margin contracting by approximately 300 bps to 46.7%. The primary reason of this contraction was our turkey operations, significantly lower volumes resulted in a higher fixed cost impact per hectolitre, while ongoing input cost inflation added further pressure to unit cost. Our international operations continue to demonstrate relatively resilient gross profitability, particularly across the CES markets. However, higher energy prices led to some gross margin dilution in international operations. Consequently, Birclk's gross profit for the first nine months amounted to 22.5 billion TL with a gross margin of 44.6%. Coming to EBITDA, Bir Group recorded 3.5 billion TL in EBITDA before non-recurring items in the third quarter, representing a 21% year-on-year decline. The EBITDA margins stood at 18.3%, corresponding to a contraction of approximately 370 BIPs. As discussed earlier, the main driver of this deterioration was the pressure on gross profitability, particularly in Turkey, where the high volume contractions reduced our ability to absorb fixed costs. On the operating expense side, we maintained our disciplined approach to expense management across our operations. In fact, absolute operating expenses declined year on year in both Turkey and our international operations, However, despite these efforts, Birclk operating expenses as a percentage of revenue increased from 36% to 37.5%, primarily due to weaker revenues. In Turkey, lower volume and reduced operating leverage resulted in a significant increase in operating expenses as a percentage of revenue, although we had quite sizable expense control measures. Our international operations continue to deliver positive results from cost discipline and operational efficiency. In Kazakhstan in particular, lower selling and marketing expenses together with reduced G&A expenses relative to revenue supported an improvement in the operating expense as a point of revenue. This performance helped partially offset the profitability pressure in Turkey, although it was not sufficient to fully compensate. Consequently, Bir Group EBITDA in the 9 months amounted to 5.9 billion TL with an EBITDA margin of approximately 12% representing a contraction of 306 EBIT compared to the same period of the last year. Turning to pre-cash flow, we recorded a significant year-on-year improvement during third quarter despite the pressure on operating profitability. Birgur free cash flow amounted to TL negative 276 million TL compared with a negative 1.7 billion TL in the third quarter of the previous year. This improvement was primarily driven by a more disciplined working capital management, lower interest payments, and contained capital expenditure. These positive developments help mitigate the impact of weaker EBITDA on cash generation and it's a proof of our continued focus on protecting liquidity and maintaining financial discipline. For the first nine months of the year, Biro Group free cash flow improved to negative 4.1 billion TL compared with a negative 7.1 billion TL in the same period of the previous year. We remain committed to our disciplined working capital management, prudent capital expenditure and operational efficiency despite the given challenging operating environment in Türkiye. Before moving to our balance sheet and risk management, let me briefly touch upon our financial performance excluding the impact of TS29. Excluding the impact of inflation accounting, Bir Group's sales revenue increased by 23.3% year-on-year to 50 billion TL in the first nine months of the year. This growth was supported by the strong revenue performance of our international operations, disciplined pricing actions, and positive impact of currency movements, particularly in Kazakhstan. On the same basis, our gross profit margins stood at 50.3%, representing a contraction of 87 BIPs compared to the previous year. EBITDA margin, excluding TS29, was 18% for the first nine months, corresponding to a contraction of 375 basis points year-on-year. This reflects the same primary operating dynamics discussed earlier, particularly the impact of weaker domestic volumes and lower operating leverage, partially mitigated by the strong contribution of our international operations. Finally, Bir Group net income, excluding the impact of TS-29, amounted to 762 million TL for the first nine months. Turning to cash and debt management, as of end of September, we group gross debt stood at approximately 45.7 billion TL, while cash and cash equivalents amounted to 11.2 billion TL, resulting in a net debt position of 34.4 billion TL. Looking at our leverage ratios excluding the impact of TS-29, Bir Group net debt to EBITDA increased to 3.3 compared to 2.4 at the end of September last year. This increase was primarily driven by weaker operating profitability, particularly in Türkiye, rather than an increase in our absolute debt position, which showed almost no change compared to last year. Including the impact of TS-29, beer group leverage ratio was reported at 5.1. On the other hand, at the consolidated Andolu Efes level, our net debt to EBITDA ratio improved to 0.9 compared to 1.3 a year ago, excluding TS-29. The ratio remained at 0.9, including the impact of the inflation account. While the increase in beer group leverage reflects a challenging economic environment, our focus remains on improving cash generation, maintaining financial discipline, and preserving a prudent and strong liquid deposition. Against the environment of ongoing costs and volatile market conditions, we continue to prioritize our visibility over our cost base. We now have 100% visibility for aluminum for 2026 and 38% for 2027. For effects exposure, 100% hedge rate is being sustained. We remain focused on optimizing our working capital position, controlling capital expenditure, and improving our liquidity. With that, let me hand over to Onur to walk you through our updated guidance.