CCI to maintain growth while managing new headwinds in 2022 


Coca-Cola Icecek (CCI), one of the key bottlers of the Coca-Cola system, has closed the year 2021 with 16.2% growth in sales volume and TRY 21.9bn net sales revenue with a 52% increase. The company also invested a total of TRY 1.3bn in its operations in Turkey and abroad in 2021. Getting full ownership of Coca-Cola Bottlers Uzbekistan in 2021 also had a positive impact on the company’s volume. However, 2022 started with more good news for CCI, as it issued Turkey’s largest sustainability-linked bond to date with a relatively lower cost compared to the country’s reference borrowing rate in the international markets.

CCI CEO Burak Basarir gives credit to CCI’s diverse geography and product portfolio, loyal and talented human resources, effective execution capability, excellent supply chain, and agile culture for the 2021 performance of the company. Operating in Turkey, Pakistan, Kazakhstan, Iraq, Uzbekistan, Azerbaijan, Kyrgyzstan, Jordan, Tajikistan, Turkmenistan, and Syria, the multinational beverage company CCI saw all its markets contribute to the strong growth momentum, according to Basarir.

In Turkey, the recovery in the on-premise consumption channel and successful actions taken in at-home consumption contributed to 13% volume growth in 2021, he said. “While Turkey’s sales volume reached its highest level in the summer, the momentum in international operations continued with 18% sales volume growth on a reported basis. Our Pakistan operation reinforced its leadership in the sparkling beverage category with its focus on value creation,” he noted.

2021 was also a good year for CCI in a strategic sense, Basarir said, referring to the Coca-Cola Bottlers Uzbekistan acquisition, which he believes will further strengthen the company’s alignment with The Coca-Cola Company. After almost a decade since their last acquisition, CCI purchased the majority stake (57.118%) of Coca-Cola Bottlers Uzbekistan for USD 252.28m in September. Later, the remaining minority stake was bought from The Coca-Cola Company, increasing CCI’s ownership to 100%. “The integration continues at full speed, with significant progress to date. We are delighted to see what a tremendous opportunity the Uzbek market offers,” Basarir commented. In 2021, CCI also acquired the remaining 20% share in Iraq from The Coca-Cola Company.

First in the EMEA beverage industry 

CCI entered the year 2022 with the issuance of a USD 500m 7-year Sustainability Linked Eurobond with a yield of 4.75% on Jan. 20. The transaction is the largest ever sustainability-linked bond in Turkey and the first Sustainability Linked Bond in Europe, Middle East, and Africa (EMEA) beverage industry. “Despite the general perception of elevated Turkey-related risks and investors’ less favorable view of emerging markets in general, we managed to differentiate CCI again with our solid financials, strong record of operating in volatile markets, and resilient business model,” said Basarir on the bond issuance.

Basarir links CCI’s successful performance, which was appraised by international credit rating agencies, with the success of the bond issuance. Standard&Poor’s (S&P) assigned BBB- long-term credit rating to CCI in its first credit rating assessment in December 2021. CCI became one of the only two investment-grade ratings in Turkey by S&P. Fitch Ratings has also affirmed CCI’s Long-Term Foreign and Local-Currency Issuer Default Ratings and senior unsecured long-term rating at BBB-. “Counting on the strong financials and long-term strategies of our company, the ratings also encouraged us to initiate the Eurobond process. We were happy to see our sustainable business model confirmed by the international markets and investors,” said Basarir.

Good governance increases investor appetite 

The CCI bond has brought energy and attention to the Turkish market, according to CCI CEO, as it was the first corporate issuance from Turkey in over six months, reopening the Turkish market after significant geopolitical instability. “It also sets an example in Turkey on how sustainability can be integrated with financial initiatives,” CEO Basarir said.

“We met more than 75 investors in two days. In those meetings, we came to understand that international investors still have an appetite for the Turkish market if there is good governance. We also hope to inspire other Turkish companies to take brave steps on sustainability.”

Why CCI needed this bond was the most frequently asked question throughout the meetings with international investors. We asked Basarir the same question. “Thanks to our strong financial structure and high liquidity, our operational and financial plans would not have been affected if this bond was not issued at all. Having said that, the bond helped us successfully extend the average maturity of our existing debts while financing some investments and general corporate needs,” he replied.

Confirmation of the business model 

Basarir admits that they took a risk by issuing the bond in a challenging period when the risk appetite towards emerging countries weakened. However, they trusted in CCI’s globally recognized brand portfolio, business model focusing on high-potential countries, corporate governance principles, and the company’s balanced financial position with strong liquidity, sustainability commitment, and sound credit ratings. “Certainly, our consistent shareholder structure with Anadolu Group, one of the leading holding companies of Turkey, and The Coca-Cola Company, one of the world’s leading companies, strengthened our confidence as well,” he stressed. 

The Coca-Cola Icecek team led by CEO Burak Basarir is happy and proud to see international markets and investors confirm the company’s sustainable business model. 

CCI employs close to 10,000 people and has 29 plants in 11 countries, offering a wide range of beverages to a consumer base of 430 million people.

We remain cautiously optimistic for 2022: Basarir

2021 was about emerging stronger out of the pandemic, which Coca-Cola Icecek (CCI) did successfully, according to CCI CEO Burak Başarır. “We are happy to report strong results across all key metrics despite increased volatility, global supply chain constraints, and rising cost inflation,” he said. The company registered 18% volume growth in the last quarter and 16% in the full year on a reported basis. CCI’s net revenue grew by 52% and reached USD 2.5 bn. Strong operating performance, combined with disciplined financial expense management, resulted in an 84% growth in net income to TRY 2.3bn. In 2022, maintaining growth momentum while managing new headwinds will be the priority, Basarir said. “In an environment where supply-side bottlenecks and increases in raw material prices continue, we remain cautiously optimistic for the new year. Thanks to our uncompromising financial discipline, we expect our EBITDA margin to remain stable or contract by up to 100 points. We expect free cash flow to grow in absolute terms,” he added.

Sustainability to create cost advantages 

Coca-Cola system sees sustainability more as a business focus rather than a social responsibility, said Coca-Cola Icecek CEO Burak Basirir. “In this respect, we produce with quality while using fewer resources and decreasing our environmental impact. With the second party opinion of the leading independent ESG research, rating, and data firm Sustainalytics, our sustainability framework at CCI will reduce Water Usage Ratio to 1.47 L/L by 2027, representing roughly 13% water efficiency increase. We further aim to reduce it to 1.4 L/L by 2029, representing a roughly 17% water efficiency increase against the 2020 baseline of 1.69 L/L. We convey our approach to energy management, climate change, water management, and sustainable packaging all along our value chain. Our ‘decrease’ and ‘effective source management’ principles create cost advantages from design to production and distribution as a result.”

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