Coca Cola Içecek Anonim Sirketi : 2023 Interim Report - Second Quarter

COCA-COLA İÇECEK A.Ş.

INTERIM REPORT

as of June 30, 2023

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TABLE OF CONTENTS

COMMENTS FROM THE CEO, BURAK BAŞARIR	3
ABOUT CCI	4
SHAREHOLDING STRUCTURE	4
BOARD OF DIRECTORS	4
MANAGEMENT	5
DEVELOPMENTS DURING THE PERIOD	5
SUBSEQUENT EVENTS	16
ADDITIONAL INFORMATION RELATED TO OPERATIONS	18
SHAREHOLDERS' INFORMATION	20
SUBSIDIARIES	21

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COMMENTS FROM THE CEO, BURAK BAŞARIR

Burak Başarır, CEO of Coca-Cola Içecek (CCI), commented:

Our 2Q23 financial results proved the resilience and flexibility of our business model in an operating environment characterized by extraordinary headwinds in our key geographies. In the second quarter of 2023, on an organic basis, CCI recorded 23 billion TL net sales revenues (NSR) with 56% growth, while FX-neutral growth was 41%. Including Anadolu Etap İçecek's operational results in May and June 2023, our reported NSR growth became 58% and 43%, respectively. Thanks to the timely price adjustments, improving package mix, and prudent Opex management, EBIT grew by 90.5% to 4.7 billion TL with a 20.0% EBIT margin. Improving by 3.4 pp on a yearly basis, this was the highest second-quarter EBIT margin in CCI's history.

In the second quarter, we faced several challenges in our operating environment, some already included in our business plans, and some were more severe than expected. Accordingly, volume declined 9.4% in Türkiye and 8.6% in international operations. In Türkiye, the softer volume performance was mainly related to the cycling of 20% growth a year ago, the lowest temperatures recorded within the last five years, fragile consumer purchasing power in Türkiye, and price increases we had to take to offset the impact of inflation and currency devaluation on the input costs.

The ongoing macroeconomic challenges in Pakistan have significantly affected the consumption patterns of households, resulting in a further decline in their consumption appetite. Moreover, the unexpected increase in excise taxes necessitated higher price increases than planned, subsequently impacting sales volume. The volume decline in Türkiye and Pakistan was partially mitigated by the double-digit volume growth achieved in Central Asia.

Accordingly, consolidated sales volume decreased by 8.9%, cycling 25% growth from a year ago. Nevertheless, we were able to deliver a robust NSR and operating profit performance, thanks to our proactive Revenue Growth Management (RGM) initiatives and prudent Opex mindset.

Despite the challenging operating environment and macroeconomic issues in the key geographies, CCI has recorded the highest NSR/UC & EBIT/UC in USD terms of the last decade with $2.5 and $0.5, respectively, in line with our real value generation focus. While this progress within the previous 5-year period is remarkable, we believe CCI still has ample room to grow its top line and efficiency metrics.

For the rest of 2023, we will closely monitor the rapidly changing external environment and evolving consumer preferences to support them by catering to their needs with the diverse portfolio of brands we operate. Building on our execution capabilities and dynamic marketing initiatives, we reiterate our 2023 guidance despite the setbacks faced in 2Q23. While we anticipate volume growth to be towards the lower end of our guidance, the topline growth and EBIT margin outlooks are projected to remain intact for the full year 2023.

In addition to pursuing organic growth opportunities in our existing markets, we are always looking at value- enhancing inorganic expansion opportunities in and around the geographies we operate. Accordingly, preliminary discussions have been initiated with TCCC regarding the potential acquisition of Coca-Cola Bangladesh Beverages. Thanks to the agile business model, strong talent pipeline, sound free cash flow generation, and strong balance sheet, we believe CCI is well-positioned to expand its know-how and footprint to new geographies.

On another front, Fitch Ratings upgraded CCI's Long-Term Issuer Default Rating by one notch to 'BBB.' This recorded one of the highest spreads to sovereign ratings globally and was a testament to our resilient financial and operational performance in a complicated macroeconomic landscape with ongoing challenges in our key markets.

We characterize CCI as a purpose-driven,customer-focused, diverse ecosystem to create value as we are in everything we do. While acknowledging the challenges our geographies pose, we believe the opportunities to create value are far greater. I am confident that our digitally enabled omnichannel strategy, strong execution capabilities, and innovative product pipeline will continue accelerating our quality growth in the coming periods. Once again, I sincerely thank our people for having an agile mindset and being highly motivated in this journey as we strive to realize our vision to be the best FMCG execution player in our geographies.

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ABOUT CCI

CCI is a multinational beverage company which operates in Türkiye, Pakistan, Kazakhstan, Iraq, Uzbekistan, Azerbaijan, Kyrgyzstan, Jordan, Tajikistan, Turkmenistan, and Syria. CCI produces, distributes and sells sparkling and still beverages of The Coca-Cola Company.

CCI employs more than 10,000 people, has a total of 30 bottling plants, and 3 fruit processing plants in 11 countries, offering a wide range of beverages to a consumer base of 430 million people. In addition to sparkling beverages, the product portfolio includes juices, waters, sports and energy drinks, iced teas and coffee.

CCI's shares are traded on the Istanbul Stock Exchange (BIST) under the symbol "CCOLA.IS".

SHAREHOLDING STRUCTURE

Anadolu Efes Biracılık ve Malt Sanayi A.Ş.	40.12%
The Coca-Cola Export Corporation	20.09%
Efes Pazarlama ve Dağıtım Ticaret A.Ş.	10.14%
Özgörkey Holding A.Ş.	1.02%
Publicly-traded	28.63%
	100.00%

The Articles of Association of our Company do not stipulate any privileges for the exercise of voting rights.

BOARD OF DIRECTORS

CCI has a Board of Directors consisting of 12 members, 4 of whom are independent. The Board Members, elected to the Board of Directors for 1 year at the Ordinary General Assembly Meeting, which was held on April 07, 2023 and in charge as of 30.06.2023 are as follows:

Tuncay Özilhan	Chairperson	(Non-executive)
İlhan Murat Özgel	Vice Chairperson	(Non-executive)
Talip Altuğ Aksoy	Member	(Non-executive)
Kamilhan Süleyman Yazıcı	Member	(Non-executive)
Rasih Engin Akçakoca	Member	(Non-executive)
Agah Uğur	Member	(Non-executive)
Ahmet Boyacıoğlu	Member	(Non-executive)
Mehmet Hurşit Zorlu	Member	(Non-executive)
Lale Develioğlu	Member	(Independent)
Ali Galip Yorgancıoğlu	Member	(Independent)
Uğur Bayar	Member	(Independent)
Tayfun Bayazıt	Member	(Independent)

In 1H23, there arose no situation which revoked the independence of independent members of the Board of Directors.

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