Coca-Cola Icecek: keeping the faith (stays BUY)
We reiterate our BUY rating on Coca-Cola Icecek (CCI) and raise our 12M price target (PT) to TRY 607.7, from TRY 275.5. We have updated our model with the 9M23 results and our revised macroeconomic forecasts. Given the robust 9M23 delivery, we anticipate that CCI should continue to record strong operating results in 2024E, thanks to its strong market positioning, pricing power and strong execution. We estimate sales volume growth to recover to 3% yoy in 2024E, from almost flat in 2023E, and forecast a 74% yoy revenue expansion. Coming off the expected high base of 2023E, we estimate the EBITDA margin to decline by 106bps yoy to 19.5% in 2024E, which could be perceived as normalisation. On valuation grounds, trading at 3.8x 2024E EV/EBITDA and 7.0x 2024E P/E, CCI is at 45% and 50% discounts, respectively, to the median multiples of the global peer group.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.
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