Coca-cola Icecek Anonim Sirketi

Ladies and gentlemen, thank you for standing by. I would like to welcome you to the Coca-Cola Icecek conference call and live webcast to present and discuss the Q1 2026 financial and operational results. We are here with the management team and today's speakers are the CEO, Mr. Karim Yahi and CFO, Ms. Cicek Uşaklugil Ruzgüneş Before starting, I would like to kindly remind you to review the disclaimer on the webcast presentation. After the call, there will be an opportunity to ask questions. I would now like to turn the call over. to Mr. Burak Berki, Head of Investor Relations. Sir, the floor is yours. Please go ahead.

Good morning and good afternoon, ladies and gentlemen. Welcome to our first quarter 2026 results webcast. As the operator said, I'm here with our CEO Karim Yahi and CFO Çiçek Uşakvegi. Today's remarks will be accompanied by a slide deck. We will then turn the call over to your questions. Before we begin, please kindly be advised of our cautionary statement. The 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. In addition, in accordance with the decree of the Capital Markets Board, our 2026 financials are reported using TAS-29, financially responding in hyperinflationary economies. The financial figures in this presentation and all comparative amounts for the previous three periods have been adjusted according to the changes in the general purchasing power of Turkish Lira in accordance with TAS-29. and are finally expressed in terms of purchasing power of the Turkish lira at end of March 2026. However, certain items from our financials are also presented without inflation adjustment for information purposes. These on-office figures are clearly identified as such. Following the call, a full transcript will be made available as soon as possible on our website. Now, let me turn the call over to our CEO Karim Yahi.

Thank you, Burak. Good morning and good afternoon, everyone. Thank you for joining CCI's first quarter 2026 results webcast. We started the year with solid momentum, delivering balanced results across our diversified geography, despite continued macroeconomic and geopolitical volatility. In a continuously challenging context, we remained focused on what we can control, and that is our disciplined execution. which enabled us to deliver resilient and quality volume and value performance across both our Türkiye and international operations. Following the escalation of geopolitical tensions at the end of February, we have been closely monitoring the potential implications and proactively taking the necessary precautions to ensure the safety of our people, the security of our assets, and the continuity of our operations. We achieved solid consolidated volume growth in the first quarter of 2026 with sales volume increasing by 6.9% year-on-year to 414 million unit cases. Growth was broad-based supported by resilient performance in Turkey and strong performance across the majority of our key international operations while Central Asia remained the primary growth engine building on last year's strong momentum. In line with our mixed improvement strategy, the consolidated meal consumption ratio improved by 105 basis points to 25.5% in the first quarter of 2026. Similarly, our on-trainage channel continued to gain traction, with its share in total volume increasing by 123 basis points to 31.1%. We will continue to prioritize smaller value-accretive packages to drive quality growth throughout the year. In the first quarter of 2026, net sales revenue increased by 10.7% to 52.4 billion Turkish Lira, supported by improved mix management and right pricing with timely execution. while growth margin significantly expanded by 592 basis points. Operating margin expansion was robust with consolidated EBIT margin expanding by 529 basis points to 13.2%. This strong performance was primarily driven by the significant improvement in growth profit margin supported by tight OPEX management. As a result, both domestic and international operations delivered margin expansion versus the prior, with the uplift in Turkey standing out as particularly strong. Next slide, please. Volume growth was primarily driven by Central Asia, while Turkey and Pakistan delivered resilient performance. The sparkling category, which delivered strong growth of 16.9% in the first quarter of last year, sustained its growth momentum with a 4.5% increase in the first quarter of 2026. Additionally, the still category, including iced teas, energy drinks, and juices, delivered strong growth of 13.3%, primarily driven by fused tea, whose sales surged by 47.4% year-on-year, boosting overall category performance. The water category experienced a 5.3% year-on-year increase. Yet, our long-term strategy to gradually reduce lower value adding volume remains intact. Consolidated immune consumption ratio increased by 105 basis points to 25.5% in the first quarter of 2026. From a channel perspective, the on-premise share of our volume increased by 123 basis points to 31.1%. In addition, reflecting our strategic focus, the quarter saw continued progress in expanding the share of no-sugar products within the sparkling category, with its share rising by 75 basis points to 3.5%, in line with our commitment to offer consumers and customers more choice and create sustainable long-term value. Next slide, please. Turkey's sales volume increased by 1.4% year-on-year to 130 million unit cases in the first quarter of 2026, striking a strong base of 8.4% growth in the same period last year. This performance was achieved despite our deliberate choice to optimize sales in the water category in line with our strategy to shift focus towards higher value categories. Excluding water, volume growth stood at 3.8% in the first quarter of 2026. The steel category delivered a strong performance, growing by 10.1% year-on-year in Turkiye. Within this segment, fuel steel recorded a robust growth of 21.5%, while the higher value-added Monster Energy brand achieved a very strong yearly increase of 82.2%, further supporting the overall category performance. Turkiye delivered solid top-line growth in the first quarter of 2026. with reporting net sales revenue increasing by 8.7% year-on-year to 20.4 billion Turkish Lira and net sales revenue per unit case rising by 7.2% to 157.6 Turkish Lira. Excluding CIS-29, net sales revenue grew by 42.3% year-on-year while net sales revenue per unit case reached 154.4% Turkish Lira, up by a strong 40.3%. Growth profit, EBIT and EBITDA margins all improved sharply year on year, driven by right pricing, effective mix management, timely procurement, and actively managed cost base and strong in-store execution, supporting both margin expansion and volume growth despite rising input costs. Next slide, please. International operations recorded a 9.6% year-on-year volume increase in the first quarter of 2026, on top of a strong base of 16.1% growth in the same period last year. Growth was broad-based across all markets, with Central Asia continuing to be a key driver of strong volume expansion. Similar to Turkey, the steel category delivered a very strong performance, growing by 56.4% versus the first quarter of 2025. This growth was primarily driven by FUSTI, which increased by 67.6%. In international operations, net sales revenue increased by 12% year-on-year to 31.9 billion Turkish Lira, while net sales revenue per unit case also grew by 2.2% in the first quarter of 2026. Gross profit margin increased by 59 basis points year-on-year to 33.7%, supported by solid volume growth across most major markets and continued cost discipline despite a more subdued pricing environment. Next slide, please. Pakistan volume grew by 0.2% year-on-year to reach 101 million unit cases in the first quarter of 2026, following a high base of 17.2% growth in the same period last year. While the competitive environment remained challenging, share of local brands in the overall market showed signs of stabilization. The Ramadan period supported volumes between the quarters. That said, heightened Geopolitical tensions in the nearby region and the sharp fuel price hikes for petrol and diesel driven by surging global oil pricing following the US-Israel conflict with Iran are negatively impacting consumer sentiment and purchasing power, partly softening demand trends. Kazakhstan sales volume increased by 11% year-on-year in the first quarter, reaching 63 million unit cases, driven by a strong innovation pipeline. All categories delivered solid growth, with the steels category standing out on the back of strong performance by FUSTI. While the sparshing category grew by 5.1%, steels volume surged by 34.9%, primarily driven by FUSTI, whose sales volume increased by 48.1% year-on-year. In addition, the canned portfolio was expanded to support the ongoing focus on increasing the meat consumption mix to 12.8%, improving versus prior year by 75 basis points. Uzbekistan delivered an impressive 40.7% year-on-year volume growth in the first quarter of 2026, with total volumes reaching 49 million unit cases, supported by the continuation of favorable market conditions, a supportive microeconomic backdrop, and strong competitive execution. Product innovations also contributed to our ability to outperform the industry. Overall, the strong momentum observed last year continued into the first quarter of 2026. Iraq sales volumes declined by 1.8% year-on-year, to 13 million cases in the first quarter of 2026, after 11 consecutive quarters of solid growth. The contraction in volumes was mainly driven by two factors. 1. Civil, political, security and economic stress caused by the spillover of the US-Israel conflict with Iran and 2. The colder than usual weather conditions during the quarter. Now, I will leave the floor to Kicek for the financial review.