Anadolu Efes (AEFES) Q2 2024 earnings summary

Executive summary

• Achieved high single-digit beer volume growth and low single-digit consolidated volume growth in H1 2024, with strong performance in Russia, Türkiye, and Moldova despite macroeconomic and cost challenges.

• Gross profitability margin expanded, supported by strong volume, pricing, and premium mix; EBITDA margin remained flat year-on-year despite increased OPEX.

• Consolidated net debt to EBITDA ratio at 0.8x as of June 30, 2024, with Beer Group in a net cash position.

• Net income declined sharply due to higher interest expenses and FX losses.

• FY2024 guidance revised downward for volume and EBITDA margin, reflecting operational and inflationary challenges.

Financial highlights

• Beer Group H1 2024 revenue: TRY 41.1B, up 1.6% YoY; gross profit: TRY 18.1B, margin flat at 43.9%.

• Consolidated sales revenue for 1H2024 was TL107.7mn, down 0.8% YoY; gross profit up 5.2% to TL41.7mn.

• EBITDA (BNRI) for 1H2024 declined 6.4% to TL18.6mn; Beer Group EBITDA (BNRI) down 22.4%.

• Net income for 1H2024 fell 20.4% to TL7.4mn; Beer Group net income down 26.7%.

• Free cash flow for 1H2024 was -TL499mn; Beer Group free cash flow was TL 7.4B in Q2, up from TL 7.2B YoY.

Outlook and guidance

• FY2024 consolidated sales volume growth revised to low-single digit; Beer Group to grow mid-single digit, soft drinks flat to low-single digit.

• Sales revenue growth expected in the low-thirties percent range on an FX-neutral basis.

• EBITDA margin anticipated to decline by around 100 bps for Anadolu Efes and 200 bps for Beer Group.

• Soft drink EBITDA/EBIT margin now expected to slightly decline or remain flat.

• Guidance excludes potential impacts from TAS 29 hyperinflationary accounting.