Anadolu Efes (AEFES) Q1 2025 earnings summary

Executive summary

• New 2035 vision targets becoming the fastest-growing beverage company with beloved brands, community enrichment, and sustainability, emphasizing core beer business, expansion, digital transformation, and sustainability.

• Consolidated volume grew 12% year-over-year, led by strong soft drinks; Beer Group volumes declined 0.7% due to a high base.

• Net revenue for Q1 2025 was TL44,346 mn, down 4.6% year-over-year; net profit attributable to owners was TL1,725 mn, a 49.7%–60% decrease.

• Russian beer operations excluded from consolidation and reclassified as financial investments, resulting in a one-time gain and impacting segment results.

• EBITDA (BNRI) dropped 25.1% year-over-year to TL4,128 mn, with margin dilution from increased marketing spend and seasonality.

Financial highlights

• Gross profit for Q1 2025 was TL14.1 billion, down from TL21.5 billion in Q1 2024; gross margin declined to 31.7%–31.8%.

• Beer Group gross margin expanded 384 bps to 40.3%, but EBITDA (BNRI) margin was -6.2% due to high pre-season marketing spend.

• Free cash flow was negative, mainly from seasonal working capital build and greenfield projects in soft drinks.

• Net debt to EBITDA (BNRI) at 2.0x for the group, 4.1x for Beer Group; cash and cash equivalents at period end were TL27.6 billion.

• Earnings per share for Q1 2025 was TL2.91, down from TL7.33 in Q1 2024.

Outlook and guidance

• No beer group guidance for 2025 due to Russian uncertainty; expect flat to modest market growth and aim to outperform in all geographies.

• Revenue growth targeted above inflation, with focus on pricing and mix; EBITDA growth expected in absolute terms but with margin pressure.

• Free cash flow expected to normalize and end the year near flat; leverage expected to remain at current levels.

• Focus on premiumization, portfolio optimization, digitalization, sustainability, and risk management.

• Results for the first three months may not be indicative of full-year performance due to seasonality.