Beer Group President and Anadolu Efes CEO Can Çaka’s Comments

I am very proud to report another quarter with very strong results amidst dynamic operating and macroeconomic environment. Our immense focus on financial discipline nourished by our revenue growth management capabilities and zero-based expense management mindset led us to deliver net sales revenue growth of 55% and EBITDA (BNRI) growth of 70% on a consolidated basis including Anadolu Etap’s operating results; implying over 200 bps margin expansion in the second quarter. This period also marks the 6th consecutive quarter where we were able to grow our margins in beer group. We managed to maintain our leverage ratios at low levels by generating outstanding level of free cash flow amounting to TL 6.3 billion with the support of our both business lines.
Our winning portfolio together with our efficient and effective execution capabilities paved the way for very strong volume results in beer group; which registered 5% growth in the quarter. Türkiye beer operations were the main source of growth while we observed strong momentum in Kazakhstan and Georgia as well. In our soft drinks business, we witnessed softer volumes in Türkiye and Pakistan operations. Yet, it was partly offset by double-digit volume growth achieved in Central Asia.
Russian beer volumes were down by low-single digits; yet displayed a significant recovery compared to the last two quarters. The beer industry showed volatile trend with slight recovery in 2Q on the back of no-pricing behavior by the players and low base of last year. Our overall pricing was ahead of competition as a result of carry over effect of last year’s price adjustments which will be normalizing in the rest of the year. Accelerated projects and re-implementation of several initiatives are expected to support 2H2023 volumes.
Türkiye beer operations had another exceptionally strong quarter. The growth momentum achieved at the beginning of the year further accelerated and volumes grew over 20% in 2Q. The overall beer market volumes were also up in the period assisted by favorable pricing and increased consumer base with higher number of international tourists.
This quarter is special for us also for another purpose. Anadolu Efes published its first Integrated Report for the year 2022. We have been publishing our Sustainability Report for over a decade now but this year we transformed our reporting into integrated thinking highlighting how we create value for all our stakeholders around the six capital elements. We have also included our medium and long-term goals and performance indicators for all value areas. We are very excited to be at the very start of a very long journey of integrating our Company’s long-term strategy with our sustainability priorities.
The strong first half results gave us the encouragement to raise our volume, revenue and EBITDA margin guidance for beer group and Anadolu Efes. Despite operating environment continue to be challenging, as we performed better than expectations in first half and as we assess a balanced risk and opportunity profile with lower inflation in international markets and lower than expected COGS pressures, we are revising our year-end guidance upwards.