Ladies and gentlemen, welcome to Anadolu Efes' first quarter 2024 financial results conference call and webcast. My name is Aslı Demirel. I am the Investor Relations and Risk Management Director of Anadolu Efes. Our presenter today is Mr. Gökçe Yanaşmayan, and our CFO. All participants will be in listen-only mode during the first part of this call. Following this, there will be a Q&A session where you can submit your questions using the question box on your web screen. If you have questions, we kindly ask you to write down your questions before the Q&A session. As stipulated by the Decree of the Capital Markets Board, the financial statements for the first quarter have been presented in accordance with the Turkish Accounting Standard 29. Financial reporting in hyperinflationary economies and retrospective adjustments have been made for the prior periods in alignment with the same standard. In this presentation, certain financial items and metrics may be presented without inflation adjustment, in order to ensure comparability with previous quarters to facilitate analysis for our performance relative to our 2024 guidance. It's important to note that the financials presented without the impact of Turkish Accounting Standard 29 are unaudited. Unless explicitly stated otherwise, all financial information disclosed in this presentation are presented in accordance with TAS 29. Just to remind you, this conference call is being recorded. The link will be available online. Before we start, I would kindly request you to refer to our notes in our presentation regarding forward-looking statements. Now, I'm leaving the ground to Mr. Gökçe Yanaşmayan, Anadolu Efes CFO. Sir? Thank you, Aslı. Good morning and good afternoon, everyone, and welcome to Anadolu Efes 2024 first quarter operational and financial results conference call. Let me start saying that at this point of time, our CEO, Onur, is in Russia, and he's experiencing connectivity problems, so I will cover his part for today's call. Well, we are very pleased to report another quarter of robust growth, achieving a double-digit increase in our Beer Group. This impressive growth is complemented by a slight rise in Anadolu Efes consolidated volume as well. Our top line, solid top-line growth has exceeded the volume increase, demonstrating the effectiveness of our pricing strategy and revenue growth management initiatives. Through diligent management of our top line, we have successfully expanded our gross profitability margin, proving our efficiency in cost control, including hedging initiatives and revenue management. Although we reported a dilution in our EBITDA margin, as we stated earlier in our guidance, it's in line with our initial expectations. It mainly comes from Russian operation in Beer Group due to cycling a very high base of last two years. Furthermore, our financial discipline is evident in our consolidated net debt to EBITDA ratio, which was recorded at a healthy level of 1x as of March 31, within our target leverage ratio range. In the first quarter of 2024, our consolidated beer volume increased by 12.4%, driven by strong performances in Türkiye and Russia. Türkiye beer volume rose by 12%, while our international beer volume saw a strong growth of 12.5%. Russia demonstrated particularly strong, strong growth, with volumes up in the mid-teens. CIS countries recorded a moderate decline, with volumes down by mid-single digits on the average. Ukraine had a successful quarter, increasing by low 30s, mainly due to last year's low base, together with the business recovery strategy, particularly in commercial drivers within all channels. In the first quarter of 2024, we experienced a growth in the Russian beer market. The market as a whole grew by high single digits, but our performance outpaced this, resulting in a mid-teens increase in our total volume. The growth was achieved despite the challenging and changing competitive landscape. We have successfully capitalized on dynamic operating environment and changing consumers' preferences. Therefore, we have gained both value and volume market share. Additionally, we expanded our product offerings with new extensions in the near beer categories, launched in March 2024. Again, in the first quarter of 2024, the CIS region experienced a decline in volume with a mid-single digit decrease on average. Moldova and Georgia, though, registered growth, while a softer performance observed in Kazakhstan, where the market itself also saw a decline. This decline can be attributed to various factors, including the impact of Ramadan and negative impact related to unfavorable weather conditions, as well as floods. In Türkiye, our company demonstrated a strong volume performance with a significant increase of 12%, surpassing the growth of the beer market. While January showed a softer volume following the price increase, taking as usual, yet we have observed an acceleration in performance throughout February and March. Despite the impact of Ramadan, we have managed to achieve robust growth in the first quarter, especially in our key brands, Efes and Efes Malt. Let's touch upon briefly on our soft drinks operation. In the first quarter of the year, CIS consolidated volumes declined by 3.2% due to lower volumes in international operations. Türkiye achieved volume growth of 5.4%, driven by effective consumer marketing activations and trade promotions. This growth is particularly significant as it cycles a low base of last year due to the impact of earthquake. In our international soft drink operations, volume decreased by 7.2%. In Pakistan, we face significant macroeconomic and political headwinds, together with a high base from last year, leading to a decline in volume. Kazakhstan registered a 10.98% decline, with foreign consumers moving back to their countries and high base of first quarter of 2023. On a positive side, Uzbekistan saw a remarkable 22.5% increase in volume, driven by improved market penetration. We delivered solid results in our top line figures as well as bottom line in the first quarter. Anadolu Efes revenues marked a 5.1% year-on-year increase, thanks to successful revenue growth management initiatives, price adjustments, as well as favorable mix addressing value generation. Despite the fluctuation, fluctuating and challenging cost escalation environment, the gross margins expanded in the period, yet EBITDA margin diluted due to operational expenses increasing ahead of revenues, which was already anticipated. Our consolidated net income was recorded at TRY 3.1 billion, despite higher financial expenses. Increased bottom line was also supported by deferred tax income and monetary gains recorded resulting from Turkish Accounting Standard 29. As anticipated, the seasonality of our business led to a negative free cash flow in the first quarter of 2024. However, we expect this trend to normalize throughout the rest of the year. Consequently, our consolidated net debt to EBITDA ratio stands at a healthy 1x, reflecting our strong indebtedness. Now, looking at the financials of Efes Beer Group, let me elaborate in more detail Efes Beer Group financials. Beer Group's consolidated revenue at the end of the first quarter of 2024 was TRY 16.2 billion, a rise of 8.1% from the year before. International beer operations saw a 6.1% increase in revenue to TRY 13 billion, while sales revenue from Türkiye beer operations saw an impressive 18.3% growth to TRY 3.1 billion. The Beer Group's margin improved by 92 basis points to 40.7%, while its gross profit climbed by 10.6% to TRY 6 billion. Due to pricing and strong growth volume in Türkiye, beer showed impressive gross profitability. Nevertheless, the gross margin of international beer declined slightly, and this was primarily driven by Russia as in line with our expectation of the year. In the next slide, I will show you the EBITDA bridge of the Beer Group and free cash flow. Beer Group's EBITDA decreased by 31.7% to TRY 1 billion, and its margin contracted by 393 basis points to 6.8%. Overall, Beer Group margin declined as a result of declining gross profit margin and increased spending, primarily due to transportation costs in international beer operations, specifically in Russia. Beer operations usually have negative free cash flow in the first quarter, as I said, mostly as a result of higher working capital requirements. The impact of increased borrowing costs in Türkiye as well resulted in greater interest expense. On the other hand, in the first quarter, capital expenditures significantly decreased compared to the prior year. And in the next slide, I want to also give a flavor about financials without the impact of TAS 29. But again, let me repeat the disclaimer here. All our financial statements are prepared in accordance with Turkish Accounting Standard 29, which is the standard for financial reporting in hyperinflationary economies. So as a result, all information disclosed on this call and in our earnings release are in full conformity with Turkish Accounting Standard 29. However, financial information presented on this slide excludes the impact of Turkish Accounting Standard 29, and is presented solely for analysis purposes. Please note that these figures won't be aligned with Anadolu Efes financials and have not undergone an independent audit. So having said so, excluding the impact of Turkish Accounting Standard 29, Beer Group revenues was TRY 16.4 billion, with a growth of 81%-82% at the end of the first quarter. Again, excluding the impact of Turkish Accounting Standard 29, EBITDA increased by 49% to TRY 1.9 billion. Excluding the impact of Turkish Accounting Standard 29, Beer Group net income was reported as TRY 693 million. About cash and debt management, at the end of the quarter, we had 64% of our cash denominated in hard currency in Beer Group, and 67% in consolidated Anadolu Efes, in line with our practices. Our net debt ratio is quite low. It's 1x for Anadolu Efes, and 0.6x for the Beer Group. As I stated, this is within the ratio, leverage ratio of our company. Following slide on the risk management, just to present key hedge figures to you. We have around 74% coverage in aluminum exposure of Türkiye and CIS countries for this year, and FX exposure actually pretty much covered here, 100% in Russia and 94% for Türkiye. That would end our presentation for today, so if there are any questions, we are ready to take them. There are a couple of questions already. Let me start with the first one, Gökçe. Please provide more color on the competitive environment in Russia. Okay. As we discussed, competitive environment obviously in Russia is changing at the moment. We are seeing that there are new, first of all, ex-Heineken and ex-Carlsberg, we have new managements and new, new shareholders there, new owners there. So there, there is a change in the market, but then we are seeing that competition is redesigning their product portfolios for the time being, and we are yet to observe how their portfolios will be looking like in the future, and trying to understand their behaviors. Any update on Russian JV deal? Well, it's in progress. Actually, we had announced in December that we have applied for legal clearances, and this process is continuing. If any developments, we will obviously publicly announce them. Why there is a large discrepancy between EBITDA margin decline in beer and much better EBITDA net income performance? That's... Just a second. I'm trying to understand the question. EBITDA margin decline in beer? That's net income performance in changing, in inflationary accounting because of monetary items, monetary and non-monetary item adjustments, actually. That's the reason of the discrepancy between without inflation and inflation, majorly. What is the reason for higher transportation costs in Russia? Do you expect normalization in this year? Well, I mean, I won't go into the details, but very briefly, I can say that shortage in railways, what we faced, that changes the mix of the transportation to trucks mainly, which is at a high cost level. Mm-hmm. We already answered the Russian beer market and the competitive market there. What is the reason behind pricing ability challenges? Are competitors following destructive competition strategy? The deal question already answered. Can you quantify reason behind decline in beer operations, EBITDA margin in terms of normalization and hedging? Any adverse impact from difficulties in Kazakhstan? Well, pricing challenges in Russian market, I would say this is actually market as usual. The this year around, the issue is that we have high cost base increases. We are having certain price increases, but they may not be enough to cover the cost inflation that we face in a single year time. That's, I think, the main challenge that we are having. And the Kazakhstan, actually, I don't think that we are expecting any adverse impact on our financials. The market volumes are under pressure, but financially, we expect to have an okay year. Would you clarify how much cash of Beer Group is in Russia? Well, as of end of first quarter, I think around 70% of our cash is in Russia. And maybe to give like- Yes, I think it wasn't asked, but let me Mm-hmm say it myself. So and around 70% of this cash in Russia is also in hard currency denomination. Is your guidance for 2024 unchanged? Well, we had previously provided a guidance with no impact of Turkish Accounting Standard 29. Currently, there is no change to that. We will have to see the results of second quarter. If you have questions, you can submit your questions using the question box on your web screen. Currently, there are more, but let's wait a few seconds. It writing down. One came. Could you please elaborate the factors that have impacted your EBITDA margins this quarter? Well, I mean, as we have been trying to emphasize this year, the main factor of why we see the decline is Russian EBITDA margin, and there, except Russia, actually, I, I can say that all our other operations are either flat or increasing their EBITDA margin. But in Russia, we knew that the cost escalation was too much for this year, and, and we would have certain dilutions in our EBITDA, so this is perfectly in line with our previous expectations. Please give some color on capital expenditure plans for 2024? Well, I think nothing changes here, actually. We, we have actually normally sticking to high single-digit CapEx spending on the average, so this is where we should be looking at. The cash repatriation from Russia. Regarding the cash repatriation, our first priority is to be able to finalize the deal approval in Russia, and then once this deal will be approved, so cash repatriation will be on our focus. What was your FX-neutral sales growth in first quarter? Maybe to skip this, and then we'll come back to it. Cash staying outside Russia, how has that evolved? Do you see any risk of debt servicing at Beer Group level due to cash balance reducing outside Russia? Well, looking at our leverage ratio, we are still at very comfortable leverage ratios, actually. Therefore, we don't see any risk of debt services at Beer Group levels. The recent statements about Türkiye's actions against Russia sanctions, will that complicate Russian deal? Well, those are very early, recent developments. I cannot, for the time being, comment on that. Currently, what we know that we are not getting any issues when it comes to sanctions. Regarding the previous question about the FX-neutral sales growth? Well, it's around, I think, 4 4%, 42%, sorry, 42%. 4%. It seems that we came to the end of the questions. So we would like to thank everyone who participated, and see you in the next quarter. Thank you. Thank you.