Turkey Consumer Staples: Exporting know-how outside Turkey (initiating on Ülker with a BUY, maintaining our BUY on Anadolu Efes and our HOLD on Coca-Cola Içecek)
With 140+ years of combined experience operating in Turkey, we believe that the major food producers are entering new era. With the domestic market consumption mature, with standards close to Europe, we expect these companies to use their domestic know-how to tap into the growth potential of their international operations, becoming more exporters by nature, taking advantage of the weak TRY environment. That said, we expect the international contribution to grow in terms of EBITDA, from an average 53% in 2017 to 67% by 2020E, with further M&A as potential upside risk, while their cheap valuations are not pricing in the limited Turkey risk, in our view. In this report, we initiate on Ãœlker (BUY, price target (PT) of TRY 25.0), our top pick, as we see its attractive valuation (a 55% 2018E EV/EBITDA discount vs. its EM peers) and solid fundamentals as an attractive entry opportunity. From the Anadolu Group companies, we prefer Anadolu Efes (BUY, PT TRY 29.0) to CCI (HOLD, PT TRY 32.5) on the back of the AB InBev merger synergies, the 19% FCF Beer Group CAGR in 2017/20E, on our estimates, and the Beer Group valuation.Anadolu Efes Biracilik ve Malt Sanayii AS is a Turkey-based company, which is engaged in the production, bottling, selling and distribution of beer under a number of trademarks and also in the production, bottling, selling and distribution of sparkling and still beverages with The Coca-Cola Company trademark. The Group owns and operates more than 14 breweries, over five malt production facilities and over 15 facilities for sparkling and still beverages production. Furthermore, the Group has joint control over Anadolu Etap Penkon Gida ve Tarim Urunleri San. ve Tic. AS (Anadolu Etap) which undertakes production and sales of fruit juice concentrates and purees in Turkey. The Group also has joint control over Syrian Soft Drink Sales & Dist. LLC (SSDSD) which undertakes distribution and sales of sparkling and still beverages in Syria.
Coca-Cola Icecek is a bottler and distributor of alcohol-free beverages in Turkey, Pakistan, Central Asia and the Middle East. Co. focuses on the production, sales and distribution of sparkling and still beverages with The Coca-Cola Company (TCCC) trademarks. Co. has rights to produce, sell and distribute TCCC branded beverages including Coca-Cola, Coca-Cola Zero, Coca-Cola Light, Fanta, Sprite, Cappy, Sen Sun, Powerade and Fuse Tea in TCCC authorized packages throughout Turkey. Co. also has the right to produce, sell and distribute Burn and Gladiator branded energy drinks throughout Turkey, as well as bottling and distribution rights in Turkey for Schweppes branded beverages.
WOOD & Company is the leading investment bank in Emerging Europe. Founded in 1991 and head-quartered in Prague, our footprint spans the region and touches investors around the globe.
A pioneer in Emerging Europe, WOOD executed many of the first CEE equity trades and landmark investment banking transactions. Our electronic trading platform was the first in the region, and remains the best. We are continually expanding our relevance and reach in these ever-evolving markets.
Our equity market share reflects our stature: 7% in Warsaw, 20% in Bucharest, 16% in Hungary, 40% in Prague and 5% in Vienna. Our distribution is unparalleled, with the largest salesforce in the region, servicing a uniquely diverse investor base.
We couple local expertise with a truly international perspective. With offices on the ground in the region, and in key financial hubs such as London and Milano, we are never far from our clients and we remain at the forefront of what’s afoot in the CEE emerging and frontier landscape.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.