Q2 2026 Coca-Cola Icecek AS Earnings Call

August 11, 2026

Operator: Ladies and gentlemen, thank you for standing by. I would like to welcome you to the Coca-Cola Icecek conference call and live webcast to present and discuss the Q2 2026 financial and operational results. We are here with the management team, and today's speakers are the CEO, Mr. Karim Yahi, and CFO, Mrs. Cicek Ucakligil Ozgunes. Before starting, I would like to kindly remind you to review the disclaimer on the webcast presentation. After the call, there will be an opportunity to ask questions. I would now like to turn the call over to Burak Berki, Head of Investor Relations. Sir, the floor is yours. Please go ahead.

Speaker #1: Ladies and gentlemen, thank you for standing by. I would like to welcome you to the Coca-Cola İçecek conference call and live webcast to present and discuss the second quarter 2026 financial and operational results.

Speaker #1: We are here with the management team and today's speakers are the CEO, Mr. Karim Yahi, and CFO, Mrs. Cicek Ushakligil Ozgunesh. Before starting, I would like to kindly remind you to review the disclaimer on the webcast presentation.

Speaker #1: After the call, there will be an opportunity to ask questions. I will now like to turn the call over to Burak Berki, Head of Investor Relations.

Speaker #1: Sir, the floor is yours. Please go ahead.

Burak Berki: Well, good morning and good afternoon, ladies and gentlemen. Welcome to our Q2 2026 results webcast. As the operator said, I am here with our CEO, Ahmet Ertin, and CFO, Cicek Ucakligil Ozgunes. Today's remarks will be accompanied by a slide deck, then we will turn the call over for questions. Before we begin, please kindly be advised of our cautionary statement. The conference call may contain forward-looking management comments, including projections. These should be considered in conjunction with the cautionary language contained in our earnings release. A copy of our earnings release and financials are available on our website. In addition, in accordance with the decree of the Capital Markets Board, our 2026 financials are reported using TAS 29, Financial Reporting in Hyperinflationary Economies.

Speaker #2: Good morning and good afternoon, ladies and gentlemen. Welcome to our second quarter 2026 results webcast. As the operator said, I'm here with our CEO, Ahmet Ertin.

Speaker #2: And CFO, Cicek Ushakligil Ozgunesh. Today's remarks will be accompanied by a slide deck. Then we will turn the call to over our questions. Before we begin, please kindly be advised of our cautionary statement.

Speaker #2: The conference call may contain forward-looking management comments, including projections. These should be considered in conjunction with the cautionary language contained in our earnings release.

Burak Berki: These should be considered in conjunction with the cautionary language contained in our earnings release. A copy of our earnings release and financials are available on our website. In addition, in accordance with the decree of the Capital Markets Board, our 2026 financials are reported using TAS 29, Financial Reporting in Hyperinflationary Economies.

Speaker #2: A copy of our earnings release and financials is available on our website. In addition, in accordance with the decree of the Capital Markets Board, our 2026 financials are reported using TAS 29 financial reporting in hyperinflationary economies.

Speaker #2: The financial figures in this presentation and all comparative amounts for period 3 is periods have been adjusted according to the changes in general purchasing power of the Turkish lira in accordance with TAS29 and finally expressed in terms of the purchasing power of TS.

Burak Berki: The financial figures in this presentation and all comparative amounts for previous periods have been adjusted according to the changes in general purchasing power of the Turkish lira in accordance with TAS 29, and finally expressed in terms of the purchasing power of TRY as of 30 June 2026. However, certain items from our financials are also presented without inflation adjustments for information purposes. These unaudited figures are clearly identified as such. Following the call, a full transcript will be made available as soon as possible on our website. Now, let me turn the call over to Ahmet Bey.

Speaker #2: As of June 30, 2026. However, certain items from our financials are also presented without inflation adjustment for information purposes. These unaudited figures are clearly identified as such.

Speaker #2: Following the call, a full transcript will be made available as soon as possible on our website. Now, let me turn the call over to Ahmet Bey.

Speaker #3: Thank you, Burak. Daniel, thank you. So, I mean, this is a term that we were together with Karim, so it is good to remember him as well.

Ahmet Kürşad Ertin: Thank you, Burak. Danielle, thank you. This is a term that we were together with Karim, so it is good to remember him as well, so we always keep his name in our mind and heart. Good morning and good afternoon, everyone. Thank you for joining CCI's Q2 2026 results webcast. It is a pleasure to speak with you for the first time as CEO of CCI. Having spent many years with the company, I have had the privilege of witnessing the dedication of our people and the strength of our business across our diverse markets. Our values, strategic priorities, and disciplined approach to execution remain firmly in place. We will continue to focus on sustainable, profitable growth, disciplined capital allocation, and creating long-term value for all our stakeholders.

Speaker #3: So we always keep his name in our mind and heart. Good morning and good afternoon, everyone. Thank you for joining CCI's second quarter 2026 results webcast.

Speaker #3: It's a pleasure to speak with you for the first time as CEO of CCI. Having spent many years with the company, I have had the privilege of witnessing the dedication of our people and the strength of our business across our diverse markets.

Ahmet Kürşad Ertin: Having spent many years with the company, I have had the privilege of witnessing the dedication of our people and the strength of our business across our diverse markets. Our values, strategic priorities, and disciplined approach to execution remain firmly in place. We will continue to focus on sustainable, profitable growth, disciplined capital allocation, and creating long-term value for all our stakeholders.

Speaker #3: Our values, strategic priorities, and disciplined approach to execution remain firmly in place. We will continue to focus on sustainable, profitable growth, disciplined capital allocation, and creating long-term value for all our stakeholders.

Speaker #3: Our second quarter performance, once again, highlighted the resilience of our business model and the benefits of our diversified geographic footprint. Despite continued macroeconomic and geopolitical uncertainty across several of our markets, including the impact of the ongoing regional conflict, we delivered another strong quarter, and the resilient first half performance.

Ahmet Kürşad Ertin: Our Q2 performance once again highlighted the resilience of our business model and the benefits of our diversified geographic footprint. Despite continued macroeconomic and geopolitical uncertainty across several of our markets, including the impact of the ongoing regional conflict, we delivered another strong quarter and a resilient H1 performance. Supported by the balanced contribution of our operations, we continue to deliver on our quality growth algorithm, turning robust volume growth into value creation across the P&L and converting that value into strong cash generation. We delivered a solid Q2 with consolidated phase volume increasing by 9.8% year-on-year to 519 million unit cases. Strong momentum across our international operations led by Pakistan and Central Asia, more than offset the subdued volume performance in Turkey. Pakistan delivered an outstanding quarter, while Central Asia sustained its growth momentum.

Ahmet Kürşad Ertin: Supported by the balanced contribution of our operations, we continue to deliver on our quality growth algorithm, turning robust volume growth into value creation across the P&L and converting that value into strong cash generation. We delivered a solid Q2 with consolidated phase volume increasing by 9.8% year-on-year to 519 million unit cases. Strong momentum across our international operations led by Pakistan and Central Asia, more than offset the subdued volume performance in Turkey. Pakistan delivered an outstanding quarter, while Central Asia sustained its growth momentum.

Speaker #3: Supported by the balanced contribution of our operations, we continue to deliver on our quality growth algorithm, turning robust volume growth into value creation across the PNL and converting that value into strong cash generation.

Speaker #3: We delivered a solid second quarter, with consolidated volume increasing by 9.8% year on year, to 519 million unit cases. Strong momentum across our international operations, led by Pakistan and Central Asia, more than offset the subdued volume performance in Turkey.

Speaker #3: Pakistan delivered an outstanding quarter, while Central Asia sustained its growth momentum. In line with our mixed improvement strategy, the consolidated immediate consumption share improved by 23 basis points from 28% to 20.2%.

Ahmet Kürşad Ertin: In line with our mixed improvement strategy, the consolidated immediate consumption share improved by 23 basis points from 28% to 20.2% in Q2 2026. Similarly, our on-premise channel continued to gain transaction, with its share in total volume increasing to 33.8%. We also continue to increase the penetration of no-sugar products within the sparkling category, with their share rising by 84 basis points year-on-year to 3.8%, further strengthening our portfolio mix and increasing the share of higher margin products. We delivered a 284 basis points expansion in gross margin to 38.2%, driven by improvements in both Turkey and our international operations. In Turkey, timely pricing actions, favorable input costs, and disciplined cost management supported profitability. Our international operations also delivered healthy margin expansion, supported by solid volume growth and continued cost discipline despite a more moderate pricing environment.

Speaker #3: In the second quarter of 2026, similarly, our on-premise channel continued to gain traction, with its share in total volume increasing to 33.8%. We also continued to increase the penetration of no-sugar products.

Speaker #3: Within the sparkling category, their share rose by 84 basis points year on year to 3.8%, further strengthening our portfolio mix and increasing the share of higher-margin products.

Speaker #3: We delivered a 284 basis point expansion in gross margin, to 38.2%, driven by improvements in both Turkey and our international operations. In Turkey, timely pricing actions, favorable input costs, and disciplined cost management supported profitability.

Ahmet Kürşad Ertin: We delivered a 284 basis points expansion in gross margin to 38.2%, driven by improvements in both Turkey and our international operations. In Turkey, timely pricing actions, favorable input costs, and disciplined cost management supported profitability. Our international operations also delivered healthy margin expansion, supported by solid volume growth and continued cost discipline despite a more moderate pricing environment.

Speaker #3: Our international operations also delivered healthy margin expansion, supported by solid volume growth and continued cost discipline, despite a more moderate pricing environment. Below the gross profit line, we continued to deliver strong financial performance with EBIT margin expanding by 287 basis points to 17.9%.

Ahmet Kürşad Ertin: Below the gross profit line, we continue to deliver strong financial performance, with EBIT margin expanding by 287 basis points to 17.9%, supported by stronger gross profitability, disciplined operating expense management across both Turkey and our international operations, and to a lesser extent, a softer base in the prior years. This translated into an increase in net profit to TRY 8.3 billion, supported by stronger operating profitability and lower net financial expenses. We generated a strong free cash flow of TRY 2.3 billion in the H1 of the year, or TRY 2.5 billion excluding inflation accounting, supported by improved profitability, disciplined capital allocation, and lower financing costs. Finally, while our H1 performance was ahead of expectations, we believe it is prudent to maintain our full year guidance.

Speaker #3: Supported by stronger gross profitability, disciplined operating expense management across both Turkey and our international operations, and to a lesser extent, a softer base in the prior year.

Ahmet Kürşad Ertin: This translated into an increase in net profit to TRY 8.3 billion, supported by stronger operating profitability and lower net financial expenses. We generated a strong free cash flow of TRY 2.3 billion in the H1 of the year, or TRY 2.5 billion excluding inflation accounting, supported by improved profitability, disciplined capital allocation, and lower financing costs. Finally, while our H1 performance was ahead of expectations, we believe it is prudent to maintain our full year guidance.

Speaker #3: This translated into an increase in net profit to TL 8.3 billion, supported by stronger operating profitability and lower net financial expenses. We generated a strong free cash flow of TL 2.3 billion in the first half of the year, or TL 2.5 billion excluding inflation accounting, supported by improved profitability, disciplined capital allocation, and lower financing costs.

Speaker #3: Finally, while our first half performance was ahead of expectations, we believe it is prudent to maintain our full-year guidance. The operating environment remains uncertain, with ongoing geopolitical developments, potential pressure from energy, and commodity costs, and a competitive market backdrop across several of our geographies.

Ahmet Kürşad Ertin: The operating environment remains uncertain, with ongoing geopolitical developments, potential pressure from energy and commodity costs, and a competitive market backdrop across several of our geographies. We prefer to retain the flexibility to continue investing in the market where we see attractive opportunities rather than optimize effort for a short-term guidance upgrade. Next slide, please. International operations delivered strong volume growth led by Pakistan and Central Asia, with positive contributions from all markets. The sparkling category maintained its growth momentum in Q2 2026, delivering a 7.9% increase on top of a 4.9% growth base in the same period last year. Coca-Cola trademark outperformed the category, posting an 11.1% growth in sales volume. The stills category, including iced teas, energy drinks, and juices, delivered robust growth of 18.5%, primarily driven by Fuze Tea, whose sales volume increased by 23.9% year-on-year and remained the key contributor to overall category performance.

Speaker #3: We prefer to retain the flexibility to continue investing in the market where we see attractive opportunities, rather than optimize our efforts for a short-term guidance upgrade.

Speaker #3: Next slide, please. International operations delivered strong volume growth, led by Pakistan and Central Asia, with positive contributions from all markets. The sparkling category maintained its growth momentum in second quarter 26.

Ahmet Kürşad Ertin: The sparkling category maintained its growth momentum in Q2 2026, delivering a 7.9% increase on top of a 4.9% growth base in the same period last year. Coca-Cola trademark outperformed the category, posting an 11.1% growth in sales volume. The stills category, including iced teas, energy drinks, and juices, delivered robust growth of 18.5%, primarily driven by Fuze Tea, whose sales volume increased by 23.9% year-on-year and remained the key contributor to overall category performance.

Speaker #3: Delivering a 7.9% increase on top of a 4.9% growth base in the same period last year. Coca-Cola trademark outperformed the category, posting an 11.1% growth in sales volume.

Speaker #3: The stills category, including iced teas, energy drinks, and juices, delivered robust growth of 18.5%, primarily driven by fusty, whose sales volume increased by 23.9% year on year, and remained the key contributor to overall category performance.

Speaker #3: The energy segment also posted a strong 21.2% year-on-year growth, supported by the continued solid volume performance of both Monster and Predator, along with Predator launch in Pakistan.

Ahmet Kürşad Ertin: The energy segment also posted strong 21.2% year-on-year growth, supported by the continued solid volume performance of both Monster and Predator, along with Predator launch in Pakistan. The water category posted an 18.4% year-on-year increase in Q2 2026 due to low base effect and pre-summer inventory build up by distributors. Our mix optimization initiatives continue to strengthen portfolio quality, supported by higher immediate consumption, on-premise, and no-sugar mix in line with our commitment to sustainable long-term value creation. Next slide, please. Turkey sales volume declined by 1.1% year-on-year to 159 million unit cases in Q2 2026, bringing the cumulative six-month volume 289 million unit case, broadly flat compared to H1 of last year. Our increasingly diversified portfolio continued to support volume performance during the quarter. While sparkling volumes declined by 6.6%, Coca-Cola Zero Sugar grew by 16.9% year-on-year.

Speaker #3: The water category posted an 18.4% year-on-year increase in second quarter 26, due to low base effect and pre-summer inventory buildup by distributors. Our mix optimization, initiatives continued to strengthen portfolio quality, supported by higher immediate consumption, on-premise and no sugar mix, in line with our commitment to sustainable long-term value creation.

Speaker #3: Next slide, please. Türkiye I mean Türkiye sales volume declined by 1.1% year-on-year to 159 million unit cases, in second quarter 26. Bringing the cumulative six-month volume 289 million unit case, broadly flat compared to first six months of last year.

Ahmet Kürşad Ertin: Next slide, please. Turkey sales volume declined by 1.1% year-on-year to 159 million unit cases in Q2 2026, bringing the cumulative six-month volume 289 million unit case, broadly flat compared to H1 of last year. Our increasingly diversified portfolio continued to support volume performance during the quarter. While sparkling volumes declined by 6.6%, Coca-Cola Zero Sugar grew by 16.9% year-on-year.

Speaker #3: Our increasingly diversified portfolio continued to support volume performance, during the quarter. While sparkling volumes declined by 6.6%, Coca-Cola zero sugar grew by 16.9 year-on-year at the same time.

Ahmet Kürşad Ertin: At the same time, the stills category expanded by 8.8% year-on-year, led by the continued strong momentum of Fuze Tea, up 11% year-on-year, and the water category increased by 15.1% due to low base of last year and pre-summer inventory build by distributors. Turkey reported NSR of TRY 26 billion in Q2, down 3.4% year-on-year. Excluding TAS-29, NSR grew by 28% year-on-year, with NSR per unit case reaching TRY 162, up 29.4 percentage year-on-year. Gross profit, EBIT, and EBITDA margins all improved sharply year-on-year, driven by the utilization of previously secured lower cost raw material inventories, favorable sugar prices, and disciplined cost and operating expense management. Next slide, please. International operations delivered a robust 15.4% year-on-year sales volume growth in Q2 2026, building on a strong 10.6% growth based in the same period last year.

Speaker #3: The stills category expanded by 8.8% year-on-year, led by the continued strong momentum of fusty, up 11% year-on-year, and the water category increased by 15.1% due to low base of last year and pre-summer inventory built by distributors.

Speaker #3: Türkiye reported NSR of TL 26 billion in second quarter, down 3.4% year-on-year, excluding TAS 29. NSR grew by 28% year-on-year, with NSR per unit case reaching to TL 162, up 29.4% year-on-year.

Ahmet Kürşad Ertin: Gross profit, EBIT, and EBITDA margins all improved sharply year-on-year, driven by the utilization of previously secured lower cost raw material inventories, favorable sugar prices, and disciplined cost and operating expense management. Next slide, please. International operations delivered a robust 15.4% year-on-year sales volume growth in Q2 2026, building on a strong 10.6% growth based in the same period last year.

Speaker #3: Gross profit EBIT and EBITDA margins all improved sharply year-on-year, driven by the utilization of previously secured secured lower cost raw material inventories, favorable sugar prices, and disciplined cost and operating expense management.

Speaker #3: Next slide, please. International international operations delivered a robust 15.4% year-on-year sales volume growth in second quarter 26, building on a strong 10.6 growth base in the same period last year.

Ahmet Kürşad Ertin: Growth was broad-based across markets, with Pakistan emerging as a standout performer during the quarter, while Central Asia continued to deliver strong momentum. All major categories posted double-digit growth. NSR increased by 12.3% to TRY 41.2 billion, driven by disciplined revenue growth management initiatives that balanced affordability with volume growth, along with mix optimization and successful product innovations. EBIT margin expanded by 296 basis points year-on-year in Q2 2026, mainly driven by substantial improvement in gross profit margin. While disciplined management operating expenses provided additional support. Next slide, please. Our largest international markets. Pakistan. Sales volume increased by an impressive 17% year-on-year to 122 million unit cases in Q2 2026. Growth was driven by Coca-Cola trademark, successful product innovations, particularly Fanta Pomegranate and Predator, as well as the Eid season.

Speaker #3: Growth was broad-based across markets, with Pakistan emerging as a standout performer during the quarter, while Central Asia continued to deliver strong momentum. All major categories posted double-digit growth.

Speaker #3: NSR increased by 12.3% to TL 41.2 billion, driven by disciplined revenue growth management, initiatives that balanced affordability with volume growth, along with mix optimization and successful product innovations.

Ahmet Kürşad Ertin: EBIT margin expanded by 296 basis points year-on-year in Q2 2026, mainly driven by substantial improvement in gross profit margin. While disciplined management operating expenses provided additional support. Next slide, please. Our largest international markets. Pakistan. Sales volume increased by an impressive 17% year-on-year to 122 million unit cases in Q2 2026. Growth was driven by Coca-Cola trademark, successful product innovations, particularly Fanta Pomegranate and Predator, as well as the Eid season.

Speaker #3: EBIT margin expanded by 296 basis points year-on-year in second quarter 26, mainly driven by substantial improvement in gross profit margin. While disciplined management of operating expenses provided additional support.

Speaker #3: Next slide, please. So largest international markets. Pakistan sales volume increased by an impressive 17% year-on-year to 122 million unit cases in second quarter 26.

Speaker #3: Growth was driven by Coca-Cola trademark. Successful product innovations, particularly Fanta Pomegranate and Predator, as well as the Eid season, despite a challenging geopolitical environment, our strengthened competitive market positioning, supported by continued investments in coolers, returnable glass bottles, and outlet expansion, remained a key competitive advantage.

Ahmet Kürşad Ertin: Despite a challenging geopolitical environment, our strengthened competitive market positioning, supported by continued investments in coolers, returnable glass bottles, and outlet expansion, remained a key competitive advantage. Kazakhstan delivered 12.7% year-on-year volume growth, cycling a solid 16.7% growth. Supported by commercial initiatives and innovation launches, growth was broad-based across both sparkling and stills categories, with Fuze Tea remaining a key growth driver, while the immediate consumption mix continued to improve. Uzbekistan sustained its strong growth trajectory in Q2 2026, with sales volume increasing by 21.1% year-on-year, following an exceptional growth of 40.7% in Q1. The operating environment remained highly supportive, benefiting from favorable macroeconomic conditions and multiple demand tailwinds, which continued to underpin healthy consumer demand and business momentum. Commercial initiatives, including product innovations and under the cap promotions across both RGB and pet packs, also contributed to the strong performance.

Speaker #3: Kazakhstan delivered 12.7% year-on-year volume growth, cycling a solid 16.7% growth, supported by commercial initiatives and innovation launches, growth was brought based across both sparkling and stills categories.

Speaker #3: With Fusty remaining a key growth driver, the immediate consumption mix continued to improve. Uzbekistan sustained its strong growth trajectory in the second quarter of 2026, with sales volume increasing by 21.1% year-on-year, following an exceptional growth of 40.7% in the first quarter.

Ahmet Kürşad Ertin: Uzbekistan sustained its strong growth trajectory in Q2 2026, with sales volume increasing by 21.1% year-on-year, following an exceptional growth of 40.7% in Q1. The operating environment remained highly supportive, benefiting from favorable macroeconomic conditions and multiple demand tailwinds, which continued to underpin healthy consumer demand and business momentum. Commercial initiatives, including product innovations and under the cap promotions across both RGB and pet packs, also contributed to the strong performance.

Speaker #3: The operating environment remained highly supportive, benefiting from favorable macroeconomic conditions and multiple demand tailwinds. Which continued to underpin healthy consumer demand and business momentum.

Speaker #3: Commercial initiatives, including product innovations, and under-the-cap promotions across both RGB and PET packs, also contributed to the strong performance. Market conditions remained broadly unchanged from the first quarter.

Ahmet Kürşad Ertin: Market conditions remained broadly unchanged from the first quarter. Operating conditions in Iraq remain challenging, with regional geopolitical tensions, oil-related disruptions, and lower tourism continuing to weigh on consumer demand. Despite these headwinds, we delivered resilient volume performance, growing sales volume by 1.1% to 37 million unit cases in the quarter. Our immediate consumption mix reached 77.2% in Q2 2026. Now I will leave the floor to Cenk for the financial review. Thank you.

Speaker #3: Operation operating conditions in Iraq remained challenging, with regional geopolitical tensions, oil-related disruptions, and lower tourism continuing to weigh on consumer demand. Despite these headwinds, we delivered resilient volume performance, growing sales volume by 1.1% to 37 million unit cases in the quarter, our immediate consumption mix reached 77.2% in second quarter 26.

Speaker #3: Now I will leave the floor to Czech for the financial review. Thank you.

Speaker #1: Thank you, Ahmed, and thank you all for joining us today. Building on the strong momentum from the first quarter, we delivered another solid quarter with robust performance across all key financial metrics.

Çiçek Uşaklıgil Özgüneş: Thank you, Ahmet, and thank you all for joining us today. Building on the strong momentum from the first quarter, we delivered another solid quarter with robust performance across all key financial metrics. I would like to highlight the quality of the performance. Revenue growth was accompanied by a significant improvement in operating profitability, which also translated strongly into the bottom line, supported by lower net financial expenses. Net sales revenue increased by 5.7% year-on-year to 67.2 billion Turkish lira, bringing the H1 revenue to 123.3 billion Turkish lira, up 7.9%. When we look at our performance, excluding the impact of inflation accounting, the underlying strength of our business becomes even more evident. Net sales revenue grew by 40.7%, while NSR per unit case increased by 28.1%, reflecting our disciplined revenue growth management, effective pricing actions, and favorable mix.

Speaker #1: I would like to highlight the quality of the performance. Revenue growth was accompanied by a significant improvement in operating profitability, which also translated strongly into the bottom line, supported by lower net financial expenses.

Çiçek Uşaklıgil Özgüneş: Net sales revenue increased by 5.7% year-on-year to 67.2 billion Turkish lira, bringing the H1 revenue to 123.3 billion Turkish lira, up 7.9%. When we look at our performance, excluding the impact of inflation accounting, the underlying strength of our business becomes even more evident. Net sales revenue grew by 40.7%, while NSR per unit case increased by 28.1%, reflecting our disciplined revenue growth management, effective pricing actions, and favorable mix.

Speaker #1: Net sales revenue increased by 5.7% year-on-year to 67.2 billion Turkish Lira, bringing the first half revenue to 123.3 billion Turkish Lira, up 7.9%. When we look at our performance, excluding the impact of inflation accounting, the underlying strength of our business becomes even more evident.

Speaker #1: Net sales revenue grew by 40.7%, while NSR per unit case increased by 28.1%, reflecting our disciplined revenue growth management, effective pricing actions, and favorable mix.

Çiçek Uşaklıgil Özgüneş: Consolidated EBIT margin increased by 287 basis points year-on-year to 17.9%. Excluding TAS-29, EBIT margin reached 19.9%, up 299 basis points year-on-year. The expansion was primarily driven by a significant improvement in gross margin, complemented by disciplined operating expense management. As a result, both our Turkiye and international operations delivered year-on-year margin expansion. Our bottom line performance remained strong in the second quarter. Net profit increased by 24.2% year-on-year to 8.3 billion Turkish lira, bringing H1 net profit to 13.9 billion Turkish lira, up 64.3% versus the same period last year. This performance was supported by stronger operating profitability across both Turkiye and our international operations, as well as lower net financial expenses, while monetary gains remained broadly stable year-on-year.

Speaker #1: Consolidated EBIT margin increased by 287 basis points year-on-year to 17.9%. Excluding TIS 29, EBIT margin reached 19.9%, up 299 basis points year-on-year. The expansion was primarily driven by a significant improvement in gross margin.

Speaker #1: Complemented by disciplined operating expense management. As a result, both our Türkiye and international operations delivered year-on-year margin expansion. Our bottom-line performance remained strong in the second quarter.

Çiçek Uşaklıgil Özgüneş: Our bottom line performance remained strong in the second quarter. Net profit increased by 24.2% year-on-year to 8.3 billion Turkish lira, bringing H1 net profit to 13.9 billion Turkish lira, up 64.3% versus the same period last year. This performance was supported by stronger operating profitability across both Turkiye and our international operations, as well as lower net financial expenses, while monetary gains remained broadly stable year-on-year.

Speaker #1: Net profit increased by 24.2% year-on-year to 8.3 billion Turkish Lira, bringing first half net profit to 13.9 billion Turkish Lira, up 64.3% versus the same last year.

Speaker #1: This performance was supported by stronger operating profitability across both Türkiye and our international operations, as well as lower net financial expenses, while monetary gains remained broadly stable year-on-year.

Çiçek Uşaklıgil Özgüneş: Excluding the impact of inflation accounting, net profits almost doubled to 8.2 billion Turkish lira from 4.4 billion Turkish lira in the second quarter of last year, highlighting the significant improvement in our underlying profitability. Next slide, please. Let me briefly walk you through our per unit case metrics now, as they provide a clearer view of the underlying business performance. On a per unit case basis, NSR declined by 3.7% year-on-year in the second quarter. Excluding the impact of inflation accounting, NSR per unit case reached 133.3 Turkish lira, up 28.1%, providing a better indication of the underlying revenue trend. In US dollar terms, NSR per unit case reached $2.90, marking the highest second quarter level in the past 10 years. The real progress this quarter is on the cost side.

Speaker #1: Excluding the impact of inflation accounting, net profit almost doubled to TRY 8.2 billion from TRY 4.4 billion in the second quarter of last year, highlighting the significant improvement in our underlying profitability.

Speaker #1: Next slide, please. Let me briefly walk you through our per unit case metrics now, as they provide a clearer view of the underlying business performance.

Speaker #1: On a per unit case basis, NSR declined by 3.7% year-on-year in the second quarter. Excluding the impact of inflation accounting, NSR per unit case reached 133.3 Turkish Lira, up 28.1%, providing a better indication of the underlying revenue trend.

Çiçek Uşaklıgil Özgüneş: On a per unit case basis, NSR declined by 3.7% year-on-year in the second quarter. Excluding the impact of inflation accounting, NSR per unit case reached 133.3 Turkish lira, up 28.1%, providing a better indication of the underlying revenue trend. In US dollar terms, NSR per unit case reached $2.90, marking the highest second quarter level in the past 10 years. The real progress this quarter is on the cost side.

Speaker #1: In US dollar terms, NSR per unit case reached $2.90, marking the highest second-quarter level in the past 10 years. The real progress this quarter is on the cost side.

Çiçek Uşaklıgil Özgüneş: Cost of sales per unit case declined by 8% in Q2, reflecting favorable commodity costs, effective hedging, and disciplined cost management. This resulted in a meaningful improvement in gross margin. Together with frugal OpEx management, EBIT per unit case increased by 14.6% and by over 50% excluding inflation accounting. Next slide, please. Moving further down the P&L, the improvement in operating profitability translated into strong bottom-line growth. Net profit reached 8.3 billion Turkish lira in Q2, as discussed, up 24.2% year-on-year, representing an increase of 1.6 billion Turkish lira in absolute terms. The biggest contributor was clearly the improvement in operating profitability. There is another element I would like to highlight here, which is the financial expense management. Despite the high interest rate environment across several of our markets, lower net financial expenses made a positive contribution to net earnings.

Speaker #1: Cost of sales per unit case declined by 8% in the second quarter, reflecting favorable commodity costs, effective hedging, and disciplined cost management. This resulted in a meaningful improvement in gross margin.

Speaker #1: Together with frugal opex management, EBIT per unit case increased by 14.6%, and by over 50% excluding inflation accounting. Next slide, please. Moving further down the P&L, the improvement in operating profitability translated into strong bottom line growth.

Çiçek Uşaklıgil Özgüneş: Next slide, please. Moving further down the P&L, the improvement in operating profitability translated into strong bottom-line growth. Net profit reached 8.3 billion Turkish lira in Q2, as discussed, up 24.2% year-on-year, representing an increase of 1.6 billion Turkish lira in absolute terms. The biggest contributor was clearly the improvement in operating profitability. There is another element I would like to highlight here, which is the financial expense management. Despite the high interest rate environment across several of our markets, lower net financial expenses made a positive contribution to net earnings.

Speaker #1: Net profit reached 8.3 billion Turkish lira in the second quarter, as discussed, up 24.2% year-on-year, representing an increase of 1.6 billion Turkish lira in absolute terms.

Speaker #1: The biggest contributor was clearly the improvement in operating profitability. But there is another element I would like to highlight here, which is the management of financial expenses.

Speaker #1: Despite the high interest rate environment across several of our markets, lower net financial expenses made a positive contribution to net earnings. This is an area where we have been deliberate, looking at liquidity and funding increasingly through a consolidated balance sheet lens rather than managing each market in isolation.

Çiçek Uşaklıgil Özgüneş: This is an area where we have been deliberate, looking at liquidity and funding increasingly through a consolidated balance sheet lens rather than managing each market in isolation. The improvement in net income reflects not only stronger operations, but also better conversion of operating profit into earnings for our shareholders. Monetary gains remained broadly stable year-on-year. Excluding TAS 29, net profit almost doubled to 8.2 billion in Q2 from 4.4 billion recorded in Q2 2025. Next slide, please. This brings me to free cash flow, which remains one of our key priorities. We generated 2.3 billion Turkish lira of free cash flow in H1, marking a significant improvement compared to -4.4 billion Turkish lira in the same period last year.

Speaker #1: So the improvement in net income reflects not only stronger operations, but also better conversion of operating profit into earnings for our shareholders. Monetary gains remained broadly stable year-on-year.

Speaker #1: Excluding TIS 29, net profit almost doubled to 8.2 billion in the second quarter from 4.4 billion recorded in second quarter of 25. Next slide, please.

Çiçek Uşaklıgil Özgüneş: Next slide, please. This brings me to free cash flow, which remains one of our key priorities. We generated 2.3 billion Turkish lira of free cash flow in H1, marking a significant improvement compared to -4.4 billion Turkish lira in the same period last year.

Speaker #1: And this brings me to free cash flow, which remains one of our key priorities. We generated TRY 2.3 billion of free cash flow in the first half, marking a significant improvement compared to negative TRY 4.4 billion in the same period last year.

Çiçek Uşaklıgil Özgüneş: This strong performance was primarily driven by improved operating profitability and lower financing costs, supported by a meaningful decline in interest expenses. In addition, the timing of CapEx spending provided a temporary relief, temporary benefit to free cash flow generation in H1 as well. Excluding TAS 29 inflation accounting, free cash flow amounted to 2.5 billion Turkish lira. The positive free cash flow generation we delivered in Q1, despite the usual seasonality of our business, provided a solid foundation for our H1 performance. While some CapEx timings, as I said, benefited the free cash flow strongly in the first six months, it is expected to normalize in the remainder of the year, and the continuation of the regional conflict may put some pressure on working capital. However, the fundamentals of our cash generation still remain strong.

Speaker #1: This strong performance was primarily driven by improved operating profitability and lower financing costs, supported by a meaningful decline in interest expenses. In addition, the timing of COPEX spending provided a temporary relief, temporary benefit to free cash flow generation in the first half as well.

Speaker #1: Excluding TIS 29 inflation accounting, free cash flow amounted to ₺2.5 billion. The positive free cash flow generation we delivered in the first quarter, despite the usual seasonality of our business, provided a solid foundation for our first half performance.

Çiçek Uşaklıgil Özgüneş: The positive free cash flow generation we delivered in Q1, despite the usual seasonality of our business, provided a solid foundation for our H1 performance. While some CapEx timings, as I said, benefited the free cash flow strongly in the first six months, it is expected to normalize in the remainder of the year, and the continuation of the regional conflict may put some pressure on working capital. However, the fundamentals of our cash generation still remain strong.

Speaker #1: While some COPEX, as I said, COPEX timings, as I said, benefited strongly from—benefited the free cash flow strongly in the first five, six months, it is expected to normalize in the remainder of the year, and the continuation of the regional conflict may put some pressure on working capital.

Speaker #1: However, the fundamentals of our cash generation still remain strong. We continue to focus on profitable growth, disciplined working capital management, and sustainable cash generation.

Çiçek Uşaklıgil Özgüneş: We continue to focus on profitable growth, disciplined working capital management, and sustainable cash generation. Next slide, please. In periods of heightened volatility like today, we deliberately take a conservative approach, prioritizing business continuity while preserving financial flexibility. Maintaining visibility over our cost base is therefore a key priority. This was particularly relevant during the quarter as geopolitical tensions in the Gulf region created upward pressure on petrochemical linked input costs. While we observed price increases across certain categories during Q2, we did not have any disruptions or delays in our supply chains. This is the most important thing for us. Our revenue growth management capabilities, together with ongoing supply chain initiatives, provide us with multiple levers to mitigate input cost inflation.

Speaker #1: Next slide, please. In periods of heightened volatility like today, we deliberately take a conservative approach, prioritizing business continuity while preserving financial flexibility. Maintaining visibility over our cost base is therefore a key priority.

Speaker #1: This was particularly relevant during the quarter as geopolitical tensions in the Gulf region created upward pressure on petrochemical-linked input costs. While we observed price increases across certain categories during the second quarter, we did not have any disruptions or delays in our supply chains.

Çiçek Uşaklıgil Özgüneş: This was particularly relevant during the quarter as geopolitical tensions in the Gulf region created upward pressure on petrochemical linked input costs. While we observed price increases across certain categories during Q2, we did not have any disruptions or delays in our supply chains. This is the most important thing for us. Our revenue growth management capabilities, together with ongoing supply chain initiatives, provide us with multiple levers to mitigate input cost inflation.

Speaker #1: This is the most important thing for us. Our revenue growth management capabilities, together with ongoing supply chain initiatives, provide us with multiple levers to mitigate input cost inflation.

Speaker #1: In addition, our participation in the Coca-Cola systems cross-enterprise procurement group strengthens our purchasing capabilities, while our previously secured inventory further cushions the near-term impact of higher input costs.

Çiçek Uşaklıgil Özgüneş: In addition, our participation in the Coca-Cola System's Cross-Enterprise Procurement Group strengthens our purchasing capabilities, while our previously secured inventory further cushions the near-term impact of higher input costs. I can confidently say that we benefit from a broad and resilient supplier base across our geography, across the key inputs, anchored by the local sourcing capabilities. Executing with local agility, sustainability of supply is the main thing here. As of July, we have secured a very significant portion of our key commodity requirements for 2026, including over 90% of sugar and resin and 80% of aluminum. We have also started selectively building coverage for 2027, where we see attractive opportunities while maintaining flexibility. As said, resin and aluminum are among the raw materials most sensitive to rising geopolitical tensions in our region.

Speaker #1: I can confidently say that we benefit from a broad and resilient supplier base across our geography, across the key inputs, anchored by the local sourcing capabilities.

Speaker #1: And executing with local agility, sustainability of supply is the main thing here. As of July, we have secured a very significant portion of our key commodity requirements for '26, including over 90% of sugar and resin, and 80% of aluminum.

Çiçek Uşaklıgil Özgüneş: As of July, we have secured a very significant portion of our key commodity requirements for 2026, including over 90% of sugar and resin and 80% of aluminum. We have also started selectively building coverage for 2027, where we see attractive opportunities while maintaining flexibility. As said, resin and aluminum are among the raw materials most sensitive to rising geopolitical tensions in our region.

Speaker #1: We have also started selectively building coverage for 2027, where we see attractive opportunities, while maintaining flexibility. As said, resin and aluminum are among the raw materials most sensitive to rising geopolitical tensions in our region.

Speaker #1: However, we are carefully capitalizing on attractive pricing windows through disciplined procurement and hedging, supporting long-term cost efficiency and margin stability. Next slide, please. And finally, let me close with the balance sheet.

Çiçek Uşaklıgil Özgüneş: However, we are carefully capitalizing on attractive pricing windows through disciplined procurement and hedging, supporting long-term cost efficiency and margin stability. Next slide, please. Finally, let me close with the balance sheet. We have always placed strong emphasis on financial discipline, which continues to stand out as one of our key competitive strengths, particularly in periods like today, where geopolitical tensions are elevated and visibility remains limited. Our balance sheet is one of the main drivers of our resilience. Strong cash generation and disciplined capital allocation have allowed us to maintain leverage below one times, despite continued investment behind growth. As of end of Q2, our net debt was $640 million, with our net debt to EBITDA ratio improving to 0.7 times from 0.8 times at the end of 2025.

Speaker #1: We have always placed a strong emphasis on financial discipline, which continues to stand out as one of our key competitive strengths, particularly in periods like today.

Speaker #1: Where geopolitical tensions are elevated and visibility remains limited. Our balance sheet is one of the main drivers of our resilience. Strong cash generation and disciplined capital allocation have allowed us to maintain leverage below one times, despite continued investment behind growth.

Çiçek Uşaklıgil Özgüneş: Our balance sheet is one of the main drivers of our resilience. Strong cash generation and disciplined capital allocation have allowed us to maintain leverage below one times, despite continued investment behind growth. As of end of Q2, our net debt was $640 million, with our net debt to EBITDA ratio improving to 0.7 times from 0.8 times at the end of 2025.

Speaker #1: As of the end of the second quarter, our net debt was $640 million, with our net debt to EBITDA ratio improving to 0.7 times from 0.8 times at the end of 2025.

Çiçek Uşaklıgil Özgüneş: Our consolidated financial debt remains well-diversified, with 54% denominated in US dollars, 4% in EUR, and the remaining 23% in Turkish lira and/or other currencies. While our overall FX position has remained broadly stable year-on-year, we have continued to optimize our borrowing structure by increasing exposure to lower interest rate markets. This strategic shift has supported a reduction in total interest expenses. Importantly, our diversification strategy goes beyond Turkish lira, expanding into key operating currencies such as Uzbek som, Pakistani rupee, Kazakhstani tenge, and Azerbaijani manat, further strengthening the natural hedge within our balance sheet. We continue to maintain a disciplined FX position. We hedge where appropriate, we match currencies where possible, and we limit structural FX short position on the balance sheet. We currently have a short FX position after net investment hedge at only $78 million, and before net investment hedge of $325 million.

Speaker #1: Our consolidated financial debt remains well diversified, with 54% denominated in US dollars, 4% in euros, and the remaining 23% in Turkish lira and/or other currencies.

Speaker #1: While our overall FX position has remained broadly stable year-on-year, we have continued to optimize our borrowing structure by increasing exposure to lower interest rate markets.

Speaker #1: This strategic shift has supported a reduction in total interest expenses. Importantly, our diversification strategy goes beyond Turkish Lira, extending into key operating currencies such as Uzbek Som, Pakistani Rupee, Kazakhstani Tenge, and Azerbaijani Manat, further strengthening the natural hedge within our balance sheet.

Çiçek Uşaklıgil Özgüneş: Importantly, our diversification strategy goes beyond Turkish lira, expanding into key operating currencies such as Uzbek som, Pakistani rupee, Kazakhstani tenge, and Azerbaijani manat, further strengthening the natural hedge within our balance sheet. We continue to maintain a disciplined FX position. We hedge where appropriate, we match currencies where possible, and we limit structural FX short position on the balance sheet. We currently have a short FX position after net investment hedge at only $78 million, and before net investment hedge of $325 million.

Speaker #1: We continue to maintain a disciplined FX position. We hedge where appropriate, we match currencies where possible, and we limit structural FX short positions on the balance sheet.

Speaker #1: We currently have a short FX position after net investment hedge at only 78 million dollars. And before net investment hedge of 325 million dollars.

Speaker #1: We consistently monitor our short position by benchmarking it against our international EBITDA, right now it is 0.5 times, ensuring it remains within prudent and manageable levels.

Çiçek Uşaklıgil Özgüneş: We consistently monitor our short position by benchmarking it against our international EBITDA. Right now, it is 0.5 times, ensuring it remains within prudent and manageable levels. The reason is that we repatriate hard currency dividends from international operations and use this to serve our FX liabilities. The majority of our scheduled debt payments in 2026 that you see in the graph here consists of local currency loans or the short-term portion of long-term facilities. Therefore, we do not anticipate any refinancing risk in this context. Now we will be happy to answer your questions. Dear closure agents, over to you, please.

Speaker #1: The reason is that we repatriate hard currency dividends from international operations and use this to serve our FX liabilities. The majority of our scheduled debt payments in 2026 that you see in the graph here consist of local currency loans or the short-term portion of long-term facilities.

Çiçek Uşaklıgil Özgüneş: The majority of our scheduled debt payments in 2026 that you see in the graph here consists of local currency loans or the short-term portion of long-term facilities. Therefore, we do not anticipate any refinancing risk in this context. Now we will be happy to answer your questions. Dear closure agents, over to you, please.

Speaker #1: Therefore, we do not anticipate any refinancing risk in this context. Now, we will be happy to answer your questions, dear closer agents, over to you, please.

Speaker #2: Thank you very much. We will now move to the Q&A section. If you would like to ask a question, please press *2 on your phone and wait to be prompted.

Operator: Thank you very much. We will now move to the question and answer section. If you would like to ask a question, please press star 2 on your phone and wait to be prompted. If you are dialing via the web, you can type your question in the box provided or request to ask a voice question. We will just wait a moment or two for the questions to come in. Our first question comes from Maxim Nekrasov from Citi. Your line is open. Please go ahead.

Speaker #2: If you are dialed in by the web, you can type your question in the box provided, or request to ask a voice question. We'll just wait a moment or two for the questions to come in.

Speaker #2: Our first question comes from Maxine Nekazov from Citi. Your line is open. Please go ahead.

Maxim Nekrasov: Yes, good afternoon. Thank you so much for the presentation. I think the most important question and topic I wanted to discuss is the guidance or the lack of any guidance upgrades. I was wondering if you can help us to reconcile very strong results we saw in H1 and the lack of the guidance change, both on the volume side and on the margin side. I am interested in particular, are there any signs in July and August that prevents you from changing the guidance and whether you see some reversal on the volume side and some moderation? On the margin side, flat EBIT margin guidance for the full year basically implies a 4 percentage point decline in H2.

Speaker #3: Yes, good afternoon. Thank you so much for the presentation. I think the most important question and topic I wanted to discuss is the guidance or the lack of any guidance upgrades.

Speaker #3: So, I was wondering if you can help us reconcile the very strong results we saw in the first half and the lack of a guidance change, both on the volume side and on the margin side.

Speaker #3: I'm interested in particular, are there any signs in July and August that prevent you from changing the guidance, and whether you see some reversal on the volume side and some moderation?

Maxim Nekrasov: I am interested in particular, are there any signs in July and August that prevents you from changing the guidance and whether you see some reversal on the volume side and some moderation? On the margin side, flat EBIT margin guidance for the full year basically implies a 4 percentage point decline in H2.

Speaker #3: And on the margin side, flat EBIT margin guidance for the full year basically implies a 4 percentage point decline in the second half of the year.

Speaker #3: Is this what you are guiding for, or are you just prefer to be cautious but there might be upside risk to your full year margin?

Maxim Nekrasov: Is this what you are guiding for or you just prefer to be cautious but there might be upside risk to your full year margin? Thank you.

Speaker #3: Thank you.

Ahmet Kürşad Ertin: Thank you, Maxim. I will try to cover some part of that, and I will ask Çiçek as well to support me. We tried to cover that one during the presentation as well. While H1 performance was strong, particularly in our international markets, we remain prudent on H2. We benefited from a relatively favorable cost environment in H1 while we expect higher raw material, energy, and distribution costs across our markets going forward. At the same time, pressure on disposable income makes affordability increasingly important. Many, many times we underline that we are operating in a low per capita market, so that is something that we have to watch out always. We want to continue investing in our markets and execution to sustain volume momentum.

Speaker #4: Thank you, Maxim. I will try to cover some part of that, and I will ask Cicek as well to support me. I mean, we try to cover that one during the presentation as well.

Speaker #4: While first half performance was strong, particularly in our international markets, we remain prudent on the second half. We benefited from a relatively favorable cost environment in the first half, while we expect higher raw material energy and distribution cost across our markets going forward.

Speaker #4: At the same time, pressure on disposable income makes affordability increasingly important. We many, many times we underline that we are operating in a low per capita market, so that's something that we have to watch out always.

Ahmet Kürşad Ertin: At the same time, pressure on disposable income makes affordability increasingly important. Many, many times we underline that we are operating in a low per capita market, so that is something that we have to watch out always. We want to continue investing in our markets and execution to sustain volume momentum.

Speaker #4: And we want to continue investing in our markets and execution to sustain volume momentum. While the strong first half may provide some upside, potential on the margin side, at this stage we do not see it as significant enough to justify a revision to our full year guidance.

Ahmet Kürşad Ertin: While the strong H1 may provide some upside potential on the margin side, at this stage, we do not see it as significant enough to justify a revision to our full year guidance. Overall, we believe our current guidance appropriately balances the opportunities and risks we see for the remainder of the year. Cicek, you want to add something on top of that?

Speaker #4: Overall, we believe our current guidance appropriately balances the opportunities and risks we see for the remainder of the year. Cicek, do you want to add something on top of that?

Çiçek Uşaklıgil Özgüneş: Well, maybe I can elaborate on Maxim’s question on July or August. No, actually, we are not seeing anything that would reverse our current trend. It is going in line with our expectations. The volume is still solid, especially in the international markets. The reason we did not change the guidance is not because of that. As Ahmet also said, we are seeing Q2 just purely from a base effect perspective, and also because the utilization of the lower cost inventory and the rest of the year we are facing a higher cost inventory, these are the main reasons why we are not right now guiding for an upgrade. There could be some upside risk naturally, especially on the volume side, but we did not see it at a level that would require us to change guidance at this point.

Speaker #1: Maybe I can elaborate on Maxim's question about July or August. No, actually, we are not seeing anything that would reverse our current trend. It's going in line with our expectations.

Speaker #1: The volume is still solid, especially in the international markets. We are not the reason we did not change the guidance is not because of that.

Çiçek Uşaklıgil Özgüneş: As Ahmet also said, we are seeing Q2 just purely from a base effect perspective, and also because the utilization of the lower cost inventory and the rest of the year we are facing a higher cost inventory, these are the main reasons why we are not right now guiding for an upgrade. There could be some upside risk naturally, especially on the volume side, but we did not see it at a level that would require us to change guidance at this point.

Speaker #1: As I said, as Ahmed also said, we are seeing second quarter from just purely from a base effect, perspective. And also because we utilization of the lower cost inventory and the rest of the year we are facing a higher cost inventory.

Speaker #1: These are the main reasons why we are not, right now, guiding for an upgrade. There could be some upside risk, naturally—especially on the volume side.

Speaker #1: But we didn't see it at a level that would require us to change guidance at this point.

Speaker #3: Mm-hmm. Understood. And just to confirm on the volume side, so basically you do not see material change compared to the previous momentum on the volume side in July, August so far.

Maxim Nekrasov: Mm-hmm. Understood. Just to confirm on the volume side, so basically you do not see material change compared to the previous momentum on the volume side in July, August so far. Just to follow up on specific markets, right? We saw a strong recovery in Pakistan, for example. How sustainable is that? Because the country was quite volatile. The performance there was quite volatile in the previous quarters. So were you able to sustain that momentum going forward?

Speaker #3: And just to follow up on specific markets, right, we saw a strong recovery in Pakistan, for example. How sustainable is that? Because the country was quite volatile the performance there was quite volatile in the previous quarters.

Speaker #3: So were you able to sustain that momentum going forward?

Speaker #4: Thank you, Maxim. Again, I mean, I lived in Pakistan six years, so I love all the questions related with Pakistan always. Pakistan I mean, is one of the most important market for us.

Ahmet Kürşad Ertin: Thank you, Maxim, again. I lived in Pakistan six years, so I love all the questions related with Pakistan always. Pakistan is one of the most important market for us. That is because the population is 215 official, but I have been hearing from the people that it is around 250. One of the lowest per capita with one of the lowest GDP, yet we have a capacity of 450 million cases of production. So that makes Pakistan a critical market for us, where our affordability focus approach remains a key competitive advantage. Through returnable packs, enhanced cold availability, targeted cooler investments, expanded outlet coverage, and disciplined trade investments, we have further strengthened our market position and consumer penetration. Despite ongoing cost inflation, we have maintained broad consumer access to our brands, supporting both competitiveness and sustainable growth.

Speaker #4: That is because the population is 215 official. But I've been hearing from the people that it is around 250. One of the lowest per capita with the one of the lowest GDP yet we have a kind of a capacity of 450 million case of a production.

Speaker #4: So that makes Pakistan a critical market for us. Where our affordability focus approach remains a key competitive advantage. True returnable packs enhance cold availability targeted cooler investments expanded outlet coverage and disciplined trade investments we have further strengthen our market position and consumer penetration.

Ahmet Kürşad Ertin: So that makes Pakistan a critical market for us, where our affordability focus approach remains a key competitive advantage. Through returnable packs, enhanced cold availability, targeted cooler investments, expanded outlet coverage, and disciplined trade investments, we have further strengthened our market position and consumer penetration. Despite ongoing cost inflation, we have maintained broad consumer access to our brands, supporting both competitiveness and sustainable growth.

Speaker #4: Despite ongoing cost inflation, we have maintained broad consumer access to our brands, supporting both competitiveness and sustainable growth. Looking ahead, we will continue investing in the market to strengthen our position and capture significant long-term growth opportunities.

Ahmet Kürşad Ertin: Looking ahead, we will continue investing in the market to strengthen our position and capture significant long-term growth opportunity. I could say that yes, we are in line with our expectation about Pakistan. Anyone wants to add anything, Cenk, about Pakistan?

Speaker #4: So I could say that, yes, we are in line with our expectation about Pakistan. Anyone wants to add anything? Cicek, about Pakistan?

Çiçek Uşaklıgil Özgüneş: No, I think that's it.

Speaker #1: No, I think that's it.

Maxim Nekrasov: Understood. Thank you so much, Ahmet and Cicek.

Speaker #3: Understood. Thank you so much, Ahmed and Cicek.

Speaker #4: Thank you, thank you.

Ahmet Kürşad Ertin: Thank you.

Operator: Thank you so much. Our next question comes from Ece Baysal from Ak Yatırım. Your line is open. Please go ahead.

Speaker #2: Thank you so much. Our next question comes from Ece Baysal from Ak Yatrim, your line is open. Please go ahead.

Ece Baysal: Hi. Thank you very much for the presentation. Ahmet Bey, I would like to congratulate you on your new role. I have also a question regarding your guidance. You have already mentioned about your cautious view for the H2 regarding volume growth and margins, also highlighting/flagging the possible cost pressure or any other uncertainty on the logistics cost. In your assumptions, have you taken into consideration any potential increase in the volume share of Pakistan operations? Because as far as I know, Pakistan had a relatively lower margin performance in the last couple of years compared to the other markets in Central Asia. Could it be related to also the change in geographical mix of your revenues? Secondly, in your guidance, you were previously highlighting high single digits CapEx over sales, but the H1 trajectory is lower than that.

Speaker #5: Hi, thank you very much for the presentation and Ahmed I would like to congratulate you on your new role. And I have also a question regarding your guidance.

Speaker #5: You have already mentioned about your cautious view for the second half regarding volume growth and margins. Also highlighting flagging the possible cost pressure or any other uncertainty.

Speaker #5: On the logistics cost, in your assumptions, have you taken into consideration any potential increase in the volume share of Pakistan operations? Because, as far as I know, Pakistan had a relatively lower margin performance in the last couple of years compared to the other markets in Central Asia.

Ece Baysal: In your assumptions, have you taken into consideration any potential increase in the volume share of Pakistan operations? Because as far as I know, Pakistan had a relatively lower margin performance in the last couple of years compared to the other markets in Central Asia. Could it be related to also the change in geographical mix of your revenues? Secondly, in your guidance, you were previously highlighting high single digits CapEx over sales, but the H1 trajectory is lower than that.

Speaker #5: So could it be related to also the change in mix of geographical mix of your revenues? And secondly, in your guidance, you were previously highlighting high single-digit capex over sales, but the first half trajectory is lower than that for the second half.

Ece Baysal: For the H2, should we see a higher capital intensity? Regarding the working capital, you mentioned about the potential risks on higher working capital management going forward. For what particular market do you assume such uncertainty or upward risk on your working capital requirement? Thank you very much.

Speaker #5: Should we expect to see higher capital intensity? And regarding working capital, you mentioned the potential risks of higher working capital requirements going forward.

Speaker #5: For what particular market do you assume such uncertainty or upward risk on your working capital requirement? Thank you very much.

Speaker #4: Thank you, thank you, Ece, so much. I mean, I will cover the first part, and the second part will be covered by Cicek.

Ahmet Kürşad Ertin: Thank you, Ece, so much. I will cover the first part and I will give the second part covered by Cicek. Pakistan, the question is, we have seen some kind of opportunities coming from some countries, and we have seen some risks coming from some other countries, and overall, that's why we haven't changed the guidance. Pakistan is going well, which is in line our expectations, more or less. We keep being aggressive and competitive. That's why I would say yes, Pakistan mix could be increased. Meanwhile, this is always having a kind of a diversified portfolio, and each and every country have a specific role at the beginning of the year, and we guide it like this, and we usually share this one with everyone at the beginning of the year.

Speaker #4: So Pakistan I mean, the question is we have seen some kind of opportunities coming from some countries and we have see some risk coming from some other countries and overall that's why we haven't changed the guidance.

Speaker #4: Pakistan is going well which is in line our expectations. More or less. We keep the aggressive and competitive. That's why I would say yes, Pakistan mix could be increased.

Ahmet Kürşad Ertin: We keep being aggressive and competitive. That's why I would say yes, Pakistan mix could be increased. Meanwhile, this is always having a kind of a diversified portfolio, and each and every country have a specific role at the beginning of the year, and we guide it like this, and we usually share this one with everyone at the beginning of the year.

Speaker #4: Meanwhile, I mean, this is always having a kind of diversified portfolio, and each and every country has a specific role at the beginning of the year.

Speaker #4: And we guided like this and we usually share this one with everyone. At the beginning of the year. So Pakistan is a market that we are looking mainly for profit volume-driven market because this is the less per capita with the less NSR and the less GDP.

Ahmet Kürşad Ertin: Pakistan is a market that we are looking mainly for profit, volume-driven market, because this is the less per capita with the less NSR and the less GDP. That is why having an expectation that Pakistan is going to increase the volume and getting a kind of increasing the share could be yes. The second part, I am giving the word to Cicek.

Speaker #4: So that's why having an expectation volume and getting a kind of a increasing the share could be yes. The second part I'm giving the word to Cicek.

Çiçek Uşaklıgil Özgüneş: Ece, on CapEx, yes, we guided for high single digits CapEx over net sales revenue for the full year, and in the H1, it is running behind that. That is the reason actually, when I was covering the free cash flow, yes, with all the excitement about the high free cash flow despite seasonality, I also mentioned that there is some phasing of the spend of the CapEx. Therefore, we did not give up certain projects. They are still continuing, but just their timings have shifted a bit, therefore, their spendings have shifted a bit as well. So in the Q3 and Q4, you will see more cash outflow due to this pre-approved, pre-aligned CapExes. For the full year, our guidance is not changing. Maybe there could be a small reduction in that, but not meaningfully.

Speaker #1: Ece, on capex—yes, we guided for high single-digit capex over net sales revenue for the full year, and in the first half it is running below that.

Speaker #1: And that is the reason actually, when I was covering the free cash flow—yes, with all the excitement about the, you know, high free cash flow despite seasonality—I also mentioned that there is some phasing of the spend of the capex.

Çiçek Uşaklıgil Özgüneş: Therefore, we did not give up certain projects. They are still continuing, but just their timings have shifted a bit, therefore, their spendings have shifted a bit as well. So in the Q3 and Q4, you will see more cash outflow due to this pre-approved, pre-aligned CapExes. For the full year, our guidance is not changing. Maybe there could be a small reduction in that, but not meaningfully.

Speaker #1: Therefore, we did not give up certain projects. They are still continuing—just their timings have shifted a bit. Therefore, their spendings have shifted a bit as well.

Speaker #1: So, in the third and fourth quarter, you will see more cash outflow due to these pre-approved, pre-aligned capexes. So, for the full year, our guidance is not changing.

Speaker #1: Maybe there could be a small, you know, reduction in that, but not meaningfully. We are spending, we are buying lines, we are buying coolers, we are expanding our footprint manufacturing footprint.

Çiçek Uşaklıgil Özgüneş: We are spending, we are buying lines, we are buying coolers, we are expanding our manufacturing footprint. Therefore, that is still there, so no changes. On working capital. Due to the war, yes, we are extra careful on working capital, because, as I mentioned when I was covering the commodity part, continuing the supply chains without any interruption is the main priority, obviously. When the war first started, we started building up stock, both finished goods and raw materials, just to make sure that there is no disruption in the operations. That trend is still continuing with a decreasing trend, but that is also having some impact on working capital.

Speaker #1: Therefore, that is still there. So no changes. On working capital, I mean, due to the war, yes, we are extra careful on working capital.

Speaker #1: As I mentioned when I was covering the commodity part, continuing the supply chains without any interruption is obviously the main priority. When the war first started, we started building up stock—both finished goods and raw materials—just to make sure that there is no disruption in the operations.

Çiçek Uşaklıgil Özgüneş: When the war first started, we started building up stock, both finished goods and raw materials, just to make sure that there is no disruption in the operations. That trend is still continuing with a decreasing trend, but that is also having some impact on working capital.

Speaker #1: And that trend is still continuing with a decreasing trend, but that is also having some impact on working capital. And also particularly in Turkey, which you can also see from Turkey's standalone balance sheet as well, the biggest challenge on working capital is in Turkey and it's mostly due to the channel mix shift as you can imagine.

Çiçek Uşaklıgil Özgüneş: Also, particularly in Turkey, which you can also see from Turkey's standalone balance sheet as well, the biggest challenge on working capital is in Turkey, and it is mostly due to the channel mix shift, as you can imagine. So we expect this trend to continue. It is more of a structural thing. But when it is combined together with higher inventories because of the war, that results in deterioration in net working capital. Nevertheless, it remains a core priority for us to decrease it to the levels that we have achieved back in 2021, 2022. So that is the trajectory that we are going. But right now, because of the war, we are seeing some pressure, especially coming from Turkey.

Speaker #1: So we expect this trend to continue. It is more of a structural thing. But when it's combined with higher inventories, because of the war, that results in a deterioration in net working capital.

Speaker #1: But nevertheless, it remains a core priority for us to decrease it to the levels that we achieved back in '21, '22—2021, 2022.

Çiçek Uşaklıgil Özgüneş: Nevertheless, it remains a core priority for us to decrease it to the levels that we have achieved back in 2021, 2022. So that is the trajectory that we are going. But right now, because of the war, we are seeing some pressure, especially coming from Turkey.

Speaker #1: So that's a trajectory that we are going. But right now, because of the war, we are seeing some pressure, especially coming from Turkey.

Ahmet Kürşad Ertin: Just I would like to beat on the second part. You know that we have a war in between us region, and all these new lines, investments are coming mainly from Europe. That is why we had some delays. When there is a delay in the line and whatever, then there will be a delay in the payment as well. Mainly, Cicek is right. That delay was mainly because of that one.

Speaker #4: I would just like to comment on the second part. As you know, we have a war in the region, and all these new line investments are coming mainly from Europe.

Speaker #4: So that's why we had some delays. And when there is a delay in the line or whatever, then there will be a delay in the payment as well.

Speaker #4: So mainly Cicek is right. So that delay was mainly because of that one.

Ece Baysal: Thank you for your comments. For the full year, will the financial leverage ratio of 0.7 times be sustainable?

Speaker #5: Thank you for your comments. So, for the full year, will the financial leverage ratio of 0.7 times be sustainable?

Çiçek Uşaklıgil Özgüneş: Yes, we believe it will. It will definitely be below one time. That is our expectations. Maybe 0.7, 0.8. We do not have a specific target for that. Yes, there will be positive free cash flow generation throughout the year. With our much controlled FX shares as well, FX exposure on the balance sheet, we believe the year-end net debt to EBIT ratio will stay, again, very low.

Speaker #1: Yes, we believe it will. I mean, it will definitely be below one times—that's our expectation; maybe 0.7, 0.8. We do not have a specific target for that.

Speaker #1: But yes, I mean, there will be positive free cash flow generation throughout the year. And with our much controlled FX exposure as well, FX exposure on the balance sheet, we believe the year-end net debt to EBITDA ratio will stay again very low.

Ece Baysal: Thank you.

Speaker #5: Thank you.

Ahmet Kürşad Ertin: Sure.

Speaker #1: Sure.

Operator: Thank you very much. Our next question comes from Hamza Kilickiram from J.P. Morgan. Your line is open. Please go ahead.

Speaker #2: Thank you very much. Our next question comes from Hamzadeh Kilikiram from JP Morgan. Your line is open. Please go ahead.

Hamza Kilickiram: Thank you, Ahmet. Big congratulations on your new post, and thank you, Cicek, for the presentation. I have three questions on operations and also your strategy. As this is your first earnings presentation, what are your top priority focus areas for the first three months, and where do you see the biggest opportunities, particularly in the Turkish market? Second, in Turkey, sparkling category is slowing, and NSR per unit case is down in Q2 after a very strong Q1. Do you expect this as a temporary setback rather than a market share loss? I try to understand what is happening in Q2 from a competition perspective and also pricing perspective. Third, on margins, with Pakistan now growing strongly, do you expect any margin dilution in H2, excluding the cost headwinds because of the increasing share of Pakistan?

Speaker #5: Thank you. Ahmet Bey, congratulations on your new post and thank you and Cicek for the presentation. I have three questions on operations and also your strategy.

Speaker #5: I mean, as this is your first earnings presentation, what are your top priority focus areas for the first few months, and where do you see the biggest opportunities, particularly in the Turkish market?

Hamza Kilickiram: Second, in Turkey, sparkling category is slowing, and NSR per unit case is down in Q2 after a very strong Q1. Do you expect this as a temporary setback rather than a market share loss? I try to understand what is happening in Q2 from a competition perspective and also pricing perspective. Third, on margins, with Pakistan now growing strongly, do you expect any margin dilution in H2, excluding the cost headwinds because of the increasing share of Pakistan?

Speaker #5: Second, in Turkey, sparkling category is slowing and NCR per unit case is down in the second quarter after very strong first Q. Do you expect this as a temporary setback rather than a market share loss?

Speaker #5: So I try to understand what is happening in the second quarter. From a competition perspective, and also pricing perspective. And third, on margins, with Pakistan now growing strongly, do you expect any margin dilution in the second half excluding the cost headwinds because of the increasing share of Pakistan?

Speaker #5: And when you say Pakistan is performing in line with expectations, I mean, what volume growth are you anticipating for the second half? Thank you.

Hamza Kilickiram: When you say Pakistan is performing in line with expectations, what volume growth are you anticipating for H2? Thank you.

Speaker #4: I mean, let me start from the third one. I mean, we know the potential of the Pakistan. That's why somehow we have been always expecting and we are always pushing Pakistan.

Ahmet Kürşad Ertin: Let me start from the third one. We know the potential of the Pakistan. That is why somehow we have been always expecting, and we are always pushing Pakistan to deliver more volume for the system. So far, we have not seen any risk in terms of overall our margin. We are in line with our margin expectation. Year-end margin expectation. Pakistan volume is increasing, but overall, that is not going to create a huge impact on our total margin. Cicek, you want to add something?

Speaker #4: To deliver more volume for the system. And so far we haven't seen any risk in terms of overall our margin. So we are in line with our margin expectation.

Speaker #4: So, year-end margin expectation. So, Pakistan volume is increasing, but overall, that's not going to create a huge impact on our total margin. Cicek, do you want to add something?

Çiçek Uşaklıgil Özgüneş: Yes, I want to add that, yes, Pakistan is growing. It is relatively lower margin business, but also what else is growing is Central Asia, especially Kazakhstan is still growing, which is the highest profitability market for us. It is balancing that in that sense. Overall, we are not yet. In theory, the growth in Pakistan should result in some margin dilution because of the geographic mix. But because Kazakhstan, and also Uzbekistan, it is also highly profitable, is growing double digits, that is compensating for the growth in Pakistan from that perspective. Overall, the reason that we are maintaining guidance is mostly coming from just the base effect and the raw materials, and the invisibility around transportation costs, which is impacting the OpEx. But yes, the growth in Pakistan is also coming at an expense of EBIT.

Speaker #1: Yes, I want to add that, yes, Pakistan is growing. It's a relatively lower-margin business, but what else is growing is Central Asia—especially Kazakhstan—which is still growing and is the highest profitability market for us.

Speaker #1: So it is balancing that in that sense. So overall, yes, in theory, the growth in Pakistan should result in some margin dilution because of the geographic mix.

Speaker #1: But because Kazakhstan and also Uzbekistan, it's also highly profitable, is growing double digit. That is compensating for the growth in Pakistan from that perspective.

Çiçek Uşaklıgil Özgüneş: But because Kazakhstan, and also Uzbekistan, it is also highly profitable, is growing double digits, that is compensating for the growth in Pakistan from that perspective. Overall, the reason that we are maintaining guidance is mostly coming from just the base effect and the raw materials, and the invisibility around transportation costs, which is impacting the OpEx. But yes, the growth in Pakistan is also coming at an expense of EBIT.

Speaker #1: So overall, the reason that we are maintaining guidance is mostly coming from just the base effect and the raw materials and the invisibility around transportation costs, which is impacting the OPEX.

Speaker #1: But yes, the growth in Pakistan is also coming at the expense of EBIT. Therefore, maybe the top line could have been more subdued with a higher EBIT margin, but that's not what we are preferring because, as Ahmet also previously said, Pakistan's role here is to contribute to growth.

Çiçek Uşaklıgil Özgüneş: Therefore, maybe the top line could have been more subdued with a higher EBIT margin, but that is not what we are preferring because as Ahmet also previously said, Pakistan's role here is to contribute to growth.

Ahmet Kürşad Ertin: Yes. In Pakistan, we have a very experienced team, and they really know the value of the business. When there is a kind of being competitive, they are focusing on the other items to manage the overall profitability as well. In terms of OpEx, in terms of discounts, in terms of spendings, they are extremely careful, and so far, for six months, they really perform well in line with our guidance. My key focus areas specifically for Turkey, let me answer first. CCI has a kind of a continuous management strategy. Still we are going to focus on growing the core. Still our core responsibility is quality growth algorithm. But specifically within the next three months or next one year, I will very much focus on three things.

Speaker #4: Yep. I mean, Pakistan, we have a they really know the value of the business. So when there's a kind of a being competitive, they are focusing on the other items to manage the overall profitability as well.

Speaker #4: So, in terms of OPEX, in terms of discounts, in terms of spending, they are extremely careful. And so far, in the first six months, they have really performed well, in line with our guidance.

Ahmet Kürşad Ertin: My key focus areas specifically for Turkey, let me answer first. CCI has a kind of a continuous management strategy. Still we are going to focus on growing the core. Still our core responsibility is quality growth algorithm. But specifically within the next three months or next one year, I will very much focus on three things.

Speaker #4: I mean, my key focus areas specifically for Turkey—let me answer that first. I mean, CCI has a kind of continuous management strategy.

Speaker #4: So, still, we are going to focus on growing the core. Still, our core responsibility is quality, growth, algorithm. But specifically, within the next three months or next one year, I will very much focus on three things.

Speaker #4: So, a key watch-out is, number one, the energy and the raw material cost, and the prices and everything, to provide the right thing.

Ahmet Kürşad Ertin: Key watch-outs is the number one is the energy and the raw material cost and the prices and everything, providing the right thing. Cicek already explained what we are planning to do, even we already had some of our needs of 2027 as well. The second one is always the talent. We need talent to lead our business, to manage our business. The third one definitely specifically is how we are going to embed the digital into our daily business, because we want to serve fast, we want to focus on our daily business and trying to get all these data from the system or digitalize. Specifically Turkey, I would say that we are the market leader. Turkey is doing 30% to 35% of our total business, together with that 30% to 35% of our total profit.

Speaker #4: So, Cicek already explained what we are planning to do. We have already addressed some of our needs for 2027 as well. The second one is always the talent.

Speaker #4: So we need talent to lead our business, to manage our business. And the third one, definitely, is specifically how we are going to embed digital into our daily business, because we want to serve fast.

Ahmet Kürşad Ertin: The third one definitely specifically is how we are going to embed the digital into our daily business, because we want to serve fast, we want to focus on our daily business and trying to get all these data from the system or digitalize. Specifically Turkey, I would say that we are the market leader. Turkey is doing 30% to 35% of our total business, together with that 30% to 35% of our total profit.

Speaker #4: We want to focus on our daily business and are trying to get all this data from the system or digitalize it. Specifically in Turkey, I would say that—we are the market leader.

Speaker #4: Turkey is doing 30 to 35 percent of our total business, together with that 30 to 35 percent of our total profit. So, as a category leader, as a market leader, we have to grow our business.

Ahmet Kürşad Ertin: As a category leader, as a market leader, we have to grow our business. Our core focus is always increasing the categories. I could say for the last, starting from May, June. April, May, June, we didn't decline more than the category. Our decline is less than the category. Still we are trying to do our best. To support the business, we are focusing on IC mix, and you already realize that IC mix increased versus the last year because every month it's increasing. The categories that are going to support overall business like the stills, Fuze Tea, water, energy, each and every category now showing some positive performance. We keep focusing on to increase our execution quality. These are more or less the areas that we need to focus on Turkey.

Speaker #4: Our core focus is always increasing the categories. I mean, I could say for the last—I mean, starting from April, May, June—we didn’t decline more than the category.

Speaker #4: Our decline is less than the category. Still we are trying to do our best. And to support the business, we are focusing on IC mix, and you already realize that IC mix increase versus the last year versus every month it's increasing.

Speaker #4: And the categories that are going to support the overall business, like the steels, Fuse Tea, water, energy—each and every category is now showing some positive performance.

Ahmet Kürşad Ertin: The categories that are going to support overall business like the stills, Fuze Tea, water, energy, each and every category now showing some positive performance. We keep focusing on to increase our execution quality. These are more or less the areas that we need to focus on Turkey.

Speaker #4: And we keep focusing on increasing our execution quality. So these are more or less the areas that we need to focus on in Turkey.

Speaker #4: And the second question—sparkling, slowing, and NSR—you see in terms of pricing and market dynamics. More or less, I covered that question as well.

Ahmet Kürşad Ertin: The second question, sparkling slowing in NSR you see in terms of pricing and market dynamics. More or less, I covered that question as well. As we were covering a low base versus last year, you might remember that H1 last year, by purpose, we focused on the volume growth. We said we need to bring the base. We have to focus on the volume. I also read your report, so its report is really describing Turkey very well. We have the benefit of this for the last three quarters and four quarters. Now it is time to have the real numbers. We already have the 162 TRY of an NSR level, as far as I remember. We already announced the price increase a month before. July, there was a marked price increase. I don't see a risk in terms of NSR.

Speaker #4: I mean, as we were covering at low base versus last year, you might remember that first half last year, by purpose, we focus on the volume growth.

Speaker #4: We said we need to bring the base. We have to focus on the volume. And then I also read your report. So, this report is really describing Turkey very well.

Ahmet Kürşad Ertin: I also read your report, so its report is really describing Turkey very well. We have the benefit of this for the last three quarters and four quarters. Now it is time to have the real numbers. We already have the 162 TRY of an NSR level, as far as I remember. We already announced the price increase a month before. July, there was a marked price increase. I don't see a risk in terms of NSR.

Speaker #4: So we have the benefit of this for the last three quarters and four quarters. Now it is time to have the real numbers. So we already have the 162 TL of an NSR level as far as I remember.

Speaker #4: And we already, I mean, announced the price increase a month before. In July, there was a marked price increase, so I don't see a risk in terms of NSR.

Speaker #4: And still, we are in line with our guidance. So that's all I can say for the moment about Turkey.

Ahmet Kürşad Ertin: Still we are in line with our guidance. That's all I can say for the moment about Turkey.

Hamza Kilickiram: All right. Thank you very much, Ahmet Bey. You say, I understand there is no market share loss in the Turkish market, so you don't see extra competition in the Turkish market. That's just like the market itself kind of slowing the sparkling category, right?

Speaker #1: All right. Thank you very much, Ahmet Bey. So, just to confirm, I understand there is no market share loss in the Turkish market. So, you don't see extra competition in the Turkish market?

Speaker #1: That's just like the market itself kind of slowing in the sparkling category, right?

Ahmet Kürşad Ertin: Yeah. Declining less than the category, yes.

Speaker #4: Yes, declining less than the category, yes.

Hamza Kilickiram: On Pakistan, I know you do not want to give any number, but after 17% growth in volume in Q2, is it also reasonable to assume like 10% double digit volume growth in the H2?

Speaker #1: On Pakistan, I know you don’t want to give any number, but after 17% growth in volume in the second quarter, is it also reasonable to assume, like, 10%—double digit?

Speaker #1: I mean, volume growth in the second half?

Ahmet Kürşad Ertin: That is what I have been expecting from Pakistan.

Speaker #4: I mean, that's what I've been expecting from Pakistan. I mean, I just answered that question. I mean, there is a market with a population of 215 million officially.

Hamza Kilickiram: I think it is the potential that you see.

Ahmet Kürşad Ertin: I often answer that question. There is a market with a population of 215 officially, we have the capacity around 250 million cases. So we have the lines, we have the people. We know what to do. We invest for the coolers, glass, shell, and everything. Yes, that is why. We are pushing our team to bring more, yet also there is a guidance for them that while you are doing it, try to do everything in a balance. So we are still expecting them to make profit as well. Pakistan is a tough case. I would explain, it is very important for the region. It is very important for the CCI because of the potential. So I could say that I am looking to Cenk that whether I can share all details or not. You mentioned this is my first time. I am going to learn what to say, what not to say.

Speaker #4: We have the capacity for around 250 million cases. So, we have the lines, we have the people, and we know what to do. We invested in the coolers.

Speaker #4: Glass, shell, and everything—yes, that's why. I mean, we are pushing our team to bring more. Yet, also, there is guidance for them that while you are doing it, try to do everything in a balance.

Speaker #4: So we are still expecting them to make a profit as well. Pakistan is a tough case—I already explained. I mean, it's very important for the region.

Ahmet Kürşad Ertin: So we are still expecting them to make profit as well. Pakistan is a tough case. I would explain, it is very important for the region. It is very important for the CCI because of the potential. So I could say that I am looking to Cenk that whether I can share all details or not. You mentioned this is my first time. I am going to learn what to say, what not to say.

Speaker #4: It is very important for the CCI because of the potential. So I could say that I am looking to check whether I can share all details or not.

Speaker #4: You mentioned this is my first time. I'm going to learn what to say, and what not to say.

Çiçek Uşaklıgil Özgüneş: Hamza, maybe I can elaborate a little bit on that. As you know, we do not give country-wide guidance except for Türkiye. For Pakistan is a challenging market in the sense that it is still very focused on affordability, and there are some local players who are playing the game of affordability. Right now we are at a level that from an indexation perspective, the brand itself, our brand with all the brand value, is at the right index level. Therefore, the consumer pool is very high, together with our good execution. We expect this to continue, but we cannot really predict if this will turn into a price war at one point. But as Ahmet was saying, we are trying to do a balance, and we will not go all in if there is a price war. Therefore, it is very difficult to put a number on Pakistan.

Speaker #1: Hamza, maybe I can elaborate a little bit on that. As you know, we don't give country-wise guidance except for Turkey. For Pakistan, it's a challenging market in the sense that it is still very focused on affordability.

Speaker #1: And there are some local players who are playing the game of affordability. Right now, we are at a level that, from an indexation perspective, the brand itself—our brand, with all the brand value—is at the right index level.

Çiçek Uşaklıgil Özgüneş: Therefore, the consumer pool is very high, together with our good execution. We expect this to continue, but we cannot really predict if this will turn into a price war at one point. But as Ahmet was saying, we are trying to do a balance, and we will not go all in if there is a price war. Therefore, it is very difficult to put a number on Pakistan.

Speaker #1: Therefore, the consumer pool is very high, together with our good execution. We expect this to continue, but we cannot really predict if this will turn into a price war at one point.

Speaker #1: As Ahmet was saying, we are trying to maintain a balance and we will not go all in if there is a price war. Therefore, it is very difficult to put a number on Pakistan. Certainly, we have certain expectations and, yes, they are looking double digit right now.

Çiçek Uşaklıgil Özgüneş: Certainly, we have certain expectations, and yes, they are looking double digits right now. However, we prefer not to give a certain guidance on Pakistan at this time.

Speaker #1: However, we prefer not to give specific guidance on Pakistan at this time.

Hamza Kilickiram: All right. Thank you very much, Ahmet and Cenk.

Speaker #2: All right. Thank you very much, Ahmet and Çiçek.

Ahmet Kürşad Ertin: Thank you.

Speaker #4: Thank you.

Çiçek Uşaklıgil Özgüneş: Thank you.

Speaker #3: Thank you very much. Just a reminder: if you would like to ask a question, please press 'star' on your phone and wait to be prompted.

Operator: Thank you very much. Just a reminder, if you would like to ask a question, please press star 2 on your phone and wait to be prompted. If you are dialing by the web, you can either type your question in the box provided or request to ask a voice question. We will just wait a moment or 2 for more questions to come in. Our next question comes from Mehmet from ÜNLÜ & Co. Should we expect a stronger price mix in international markets in H2 to support the flat to mid-single digit consolidated NSR per unit case guidance?

Speaker #3: If you are dialed in by the web, you can either type your question in the box provided or request you ask a voice question.

Speaker #3: We'll just wait a moment or two for more questions to come in. Our next question comes from Mehmet from Umlu Eco. Should we expect a stronger price mix in international markets in the second half to support the flat to mid-single digit consolidated net sales revenue per unit case guidance?

Çiçek Uşaklıgil Özgüneş: You should expect a stronger price mix from all markets. In H1, the price mix, as Ahmet was also telling, we wanted to support the volumes as well. So, in H2, you will see the price mix balanced across all markets, not only international markets, but also on the Türkiye side.

Speaker #1: I mean, you should expect a stronger price mix from all markets in the first half, the price mix, as Ahmet was also telling.

Speaker #1: We wanted to support the volumes as well. So in the second half, you will see the price mix balanced across all markets, not only international markets.

Speaker #1: But also on the Turkey side.

Speaker #4: NSR, you're saying guidance? Okay.

Ahmet Kürşad Ertin: Okay.

Operator: Thank you so much. Our next question is a text question from Juan Cantus from Cobas Asset Management. How much positive impact you are seeing from the World Cup? Do you plan for higher NSR per unit case in US dollars in the H2 of the year?

Speaker #3: Thank you so much. Our next question is a text question from Juan Cantos from Cobas Asset Management. How much positive impact have you seen from the World Cup?

Speaker #3: Do you plan for higher net sales revenue per unit case in US dollars in the second half of the year?

Ahmet Kürşad Ertin: I will cover the first one. Definitely, yes. We have seen the positive impact of the World Cup. We mentioned this in two ways. The first, we said that we are heavily investing on the DME to not miss that kind of a big occasion. Meanwhile, four of our country joined the World Cup. Unfortunately, all of them eliminated in the first quarter. We have not seen the benefit more. During the presentation, we shared that almost in all of our countries, our IC mix increased. Basically, this World Cup incentivizes our IC mix products, the can, and all these kind of initiatives. That help us a lot. Second part, Cenk, you can cover that one.

Speaker #4: I will cover the first one. I mean, definitely yes. We have seen the positive impact of the World Cup. So we mentioned this in two ways.

Speaker #4: The first, we said that we are heavily investing on the DME. To don't miss that kind of a big occasion. And meanwhile, four of our country joined the World Cup.

Speaker #4: Unfortunately, all of them were eliminated in the first quarter. We haven't seen the benefit more. And during the presentation, we shared that almost in all of our countries, our IC mix increased.

Ahmet Kürşad Ertin: During the presentation, we shared that almost in all of our countries, our IC mix increased. Basically, this World Cup incentivizes our IC mix products, the can, and all these kind of initiatives. That help us a lot. Second part, Cenk, you can cover that one.

Speaker #4: So basically this World Cup incentivize our IC mix products, the can and all these kind of initiatives that help us a lot. Second part, Cicek, you can cover that one.

Çiçek Uşaklıgil Özgüneş: To support the volumes and to keep the momentum, we are looking at applying all the revenue growth management tools to deliver a solid top line to support the volumes. Therefore, in the H2 of the year, the NSR per UC will be not lower than H1, but the growth trend will be slower in certain markets than in the H1 because some price increases will be postponed, maybe postponed. This will be very agile decisions as we go, looking by how the volume is performing. Right now, we did not make any changes to our guidance. We are confident that we can deliver our NSR per UC guidance as well. There could be some slowdown in certain markets because of growth coming to support the volumes.

Speaker #1: In this, I mean to support the volumes and to keep the momentum, we are looking at, you know, managing and applying all the revenue growth management tools.

Speaker #1: To deliver a solid top line, to support the volumes. Therefore, in the second half of the year, the NSR per UC will be low—not lower than the first half—but the growth trend will be slower in certain markets than in the first half, because some price increases may be postponed.

Speaker #1: And but this will be very, you know, agile decisions as we go looking by how the volume is performing. So right now we did not make as you know any changes to our guidance.

Çiçek Uşaklıgil Özgüneş: This will be very agile decisions as we go, looking by how the volume is performing. Right now, we did not make any changes to our guidance. We are confident that we can deliver our NSR per UC guidance as well. There could be some slowdown in certain markets because of growth coming to support the volumes.

Speaker #1: So, we are confident that we can deliver our NSR per UC guidance as well. But there could be some slowdown in certain markets because—.

Speaker #1: Of growth coming to support the volumes.

Operator: Thank you so much. Our next question comes from Omer Kara from Taşlar Asset Management. Firstly, Omer, thank you so much for your first question. The CCI team has already answered that. Regarding to your second question, are you taking sugar tax and the last competition authority decision regarding the refrigerator into consideration as a significant risk in terms of market share and price increases?

Speaker #3: Thank you so much. Our next question comes from Omer Kara from Tarsiler Asset Management. Firstly, Omer, thank you so much for your first question.

Speaker #3: The CCIS team has already answered that. Now, regarding your second question, are you taking Sugary Tax and the latest Competition Authority decision regarding the refrigerator into consideration as a significant risk in terms of market share and price increases?

Speaker #4: I mean, for the sugar tax, this is an ongoing policy discussion in Turkey around potential additional health-related fiscal measures, including a possible contribution mechanism linked to the Healthy Living Funds.

Ahmet Kürşad Ertin: For the sugar tax, this is an ongoing policy discussion in Türkiye around potential additional health-related fiscal measures, including a possible contribution mechanism linked to the Healthy Living Fund. They are calling this Healthy Living Fund. However, no final framework has been announced at this stage, so it is too early to assess any potential financial impact. It is important to note that the non-alcoholic beverage category already carries a significant indirect tax burden, including Special Consumption Tax, in addition to VAT. We fully support the public health objective and believe that the most effective approach should be evidence-based, holistic, and developed through broad stakeholder consultation, considering existing taxation, consumer affordability, and overall economic impact. We continue to monitor the regulatory process closely and engage constructively with relevant stakeholders.

Speaker #4: So, we are calling this the Healthy Living Fund. However, no final framework has been announced at this stage, so it is too early to assess any potential financial impact.

Speaker #4: It is important to note that the non-alcoholic beverage category already carries a significant indirect tax burden, including a special consumption tax in addition to VAT.

Ahmet Kürşad Ertin: It is important to note that the non-alcoholic beverage category already carries a significant indirect tax burden, including Special Consumption Tax, in addition to VAT. We fully support the public health objective and believe that the most effective approach should be evidence-based, holistic, and developed through broad stakeholder consultation, considering existing taxation, consumer affordability, and overall economic impact. We continue to monitor the regulatory process closely and engage constructively with relevant stakeholders.

Speaker #4: We fully support the public health objective and believe that the most effective approach should be evidence based holistic and developed through broad stakeholder consultation.

Speaker #4: Considering existing taxation, consumer affordability and the overall economic impact. So we continue to monitor the regulatory process closely and engage constructively with relevant stakeholders.

Ahmet Kürşad Ertin: From an operational perspective, our diversified portfolio, growing low and no sugar offerings, package architecture, and revenue growth management capabilities provide us with flexibility to adapt to different regulatory and consumer environments. Ultimately, any potential impact will depend on the final scope, tax base, and implementation timeline of the regulation. Competition boards, yes, we have a kind of a new set of requirements. I could say with the competition board that I was in Türkiye at that time, the first time that we had these kinds of requirements. Since then, we have been working in line with this guidance. It has been roughly 12 to 13 years, I think the first time that we had some kind of a requirement, as of 2013, if I am not wrong. We will share the details.

Speaker #4: From an operational perspective, our diversified portfolio, growing low- and no-sugar offering, package architecture, and revenue growth management capabilities provide us with flexibility to adapt to different regulatory and consumer environments.

Speaker #4: Ultimately, any potential impact will depend on the final scope, tax base, and implementation timeline of the regulation. And the Competition Board, I mean, yes, we have a kind of a new set of requirements.

Speaker #4: I mean, I could say with the Competition Board that I was in Turkey at that time, the first time that we had these kinds of requirements.

Ahmet Kürşad Ertin: I could say with the competition board that I was in Türkiye at that time, the first time that we had these kinds of requirements. Since then, we have been working in line with this guidance. It has been roughly 12 to 13 years, I think the first time that we had some kind of a requirement, as of 2013, if I am not wrong. We will share the details.

Speaker #4: Since then, we have been working in line with these guidelines. It has been roughly 12 to 13 years. I think the first time that we had some kind of requirements was in 2013, if I'm not wrong.

Speaker #4: We will share the details. But since then, yes, we know how to lead our business in line with the expectations of the authorities. And I'm confident that we are going to do the same again.

Ahmet Kürşad Ertin: Since then, yes, we know how to lead our business in line with the expectation of the authority, and I am confident that we are going to do the same again.

Operator: Thank you very much. Just a final reminder, if you would like to ask a question, please press star 2 on your phone and wait to be prompted. If you are dialing by the web, you can either type your question in the box provided or request to ask a voice question. We will just wait a moment or two for more questions to come in. I am not seeing any more questions, so perhaps I can hand it back to the CCI team for the closing remarks.

Speaker #3: Thank you very much. Just a final reminder: if you would like to ask a question, please press star two on your phone and wait to be prompted.

Speaker #3: If you are dialed in via the web, you can either type your question in the box provided or request to ask a voice question.

Speaker #3: We'll just wait a moment or two for more questions to come in. I'm not seeing any more questions, so perhaps I can hand it back to the CCI team for the closing remarks.

Speaker #1: Thank you all for joining and listening in. Hope to see you next quarter.

Çiçek Uşaklıgil Özgüneş: Thank you all for joining and listening in. Hope to see you next quarter.

Speaker #4: Thank you.

Ahmet Kürşad Ertin: Thank you.

Operator: This concludes the call for today. We are now closing all the lines. Thank you and have a nice day.

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