OYAK SECURITIES

July 10, 2015

Coca Cola eceks 1H15 volume data

Soft drinks

(CCOLA, Outperform, TP: TL53.28)

Coca Cola Icecek announced its 1H15 sales volume of 561 mn u/c (1% YoY shrinkage: Turkey volumes down by 4%,
international up by 2%) after market close yesterday. 2Q15 data includes a 1% YoY shrinkage in Turkey volumes and a
mere 1% YoY growth on international front which paved the way for a flattish consolidated YoY volume change in the
second quarter. Despite the fact that Turkey 2Q performance came better than our 2% shrinkage estimate, international
performance was below our 4% growth estimate. Apart from expected slowdown in CIS growth, Pakistan growth of 3%
was disappointing. However, in our opinion better than expected Turkey volumes and also pick-up in high margin country
Kazakhstan are partially supportive. Thus, we expect volume datas impact on the share performance to be slightly
negative.
For Turkey operations 2Q15 performance, high base, weak consumer confidence, weather, price increases (IC in early
2015 and FC in 2Q15) and earlier start of Ramadan had impact on the 1% YoY decline. Excluding tea, the volume
contraction was 0.3%. Please recall that sparkling beverage category had contracted by 8.3% YoY in 1Q15 and the
contraction receded to 5.6% in 1H15. Still beverages (excluding water) growth was 6.7% mainly attributable to strong ice
tea demand surpassing 1Q15s 3.4% growth.

YoY SD vol change

Turkey
International

1Q13
8%
43%

2Q13
4%
37%

3Q13
-6%
34%

4Q13
2%
14%

1Q14
7%
21%

2Q14
4%
12%

3Q14
1%
16%

4Q14
-12%
8%

1Q15
-8%
5%

2Q15
-1%
1%

Source: CCI, Oyak Securities, SD: soft drink

In 2Q15, international volume growth was a mere 0.7%. The volume growths in Pakistan and Kazakhstan were 3.0% and
2.8%, respectively. Kazakhstans momentum was positive but conditions are said to remain challenging in other CIS
countries (i.e. Azerbaijan market is stated to have contracted in double digits in 2Q15). Middle East volume was down by
2.9% YoY in 1H15 due to 4.6% contraction in Iraq. Some contraction in South Iraq was the case due to weak trading
environment related to lower oil price. Please recall that in previous quarters, problematic North Iraq due to upheavals
were partially overcome by better volumes in South but it seems it is getting weaker too.
For 2015, we currently maintain our respective growth forecasts of 2% and 9% for Turkey and international volumes,
which imply 8% and 15% 2H15 volume growths with upside risk in the former and downside risk on the latter. Please recall
that companys 2015 volume guidance is low single digit growth in Turkey and low teen growth in international. We might
observe some downward in revision in international operations guidance at 2Q15 results conference call on 13th August.

Melis Pocar
+90 212 319 1411
melis.pocar@oyakyatirim.com.tr

OYAK Securities

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July 10, 2015

OYAK Securities

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