Anadolu Efes Biracilik ve Malt Sanayi : Announcement-1Q2016 Financial Results

RESULTS FOR 1Q2016

RESULTS FOR 1Q2016‌‌‌‌‌‌‌‌‌‌

EARNINGS RELEASE

May 4, 2016

A N A D OLU E F E S C ONS OLID A TED HIGHLI GHTS

First Quarter Highlights

Consolidated sales volume down 3.2% to 16.5mhl Consolidated net sales revenue flat at TL 1,933.2 million Consolidated EBITDA (BNRI) down 8.7% to TL 252.9 million

Consolidated net income was TL 60.3 million vs. loss of TL 212.0 million in 1Q2015

Consolidated (million TL) 1Q 2015 1Q 2016 Change %

Volume (mhl) 17.1 16.5 -3.2%

Net Sales 1,931.0 1,933.2 0.1%

Gross Profit 788.8 732.0 -7.2%

EBIT (BNRI) 85.5 47.0 -45.0%

EBITDA (BNRI) 277.1 252.9 -8.7%

Net Income/(Loss)* -212.0 60.3 128.4%

Change (bps)

Gross Profit Margin 40.8% 37.9%-298

EBIT (BNRI) Margin 4.4% 2.4%-200

EBITDA (BNRI) Margin 14.3% 13.1%-127

Net Income Margin* -11.0% 3.1%1,409

* Net income attributable to shareholders

Consolidated sales volume of Anadolu Efes was 16.5mhl in the challenging and seasonally small 1st quarter while consolidated revenues performed better than volumes contributed by both local currency price increases and positive mix impact.

Increases in our cost base, higher fixed costs due to lower volumes, as well as weaker local currencies against the same period of the previous year, resulted in lower gross profit margin at 37.9% in 1Q2016, as mentioned in our 2016 guidance. We managed to mitigate the decline in gross margin by continued expense and efficiency management and accordingly our EBITDA (BNRI) margin decline was limited to 127 bps.

Anadolu Efes reported net profit of TL60.3 million in 1Q2016. Thanks to stronger TL against USD as of 31 March 2016 compared to 2015-end, a net non-cash F/X gain of TL81.2 million was recorded in 1Q2016, leading to a significant improvement in the bottomline.

Although our beverage business tends to generate a negative free cash flow in the first quarters of the years given the seasonality, Anadolu Efes reported a negative free cash flow of TL 68.9 million in 1Q2016, which was less than half of the figure of the same period of last year, as a result of tight working capital management and lower capex requirements.

Consolidated net debt to EBITDA (BNRI) was 2.0x as of 1Q2016.

MANAGEMENT COMMENTS

"In the first quarter of 2016, we have recorded consolidated sales volume of 16.5 mhl and net sales revenue of TRY 1.9 billion, which was mostly in line with our guidance. 2016 started tougher than we expected. Although the first quarter is the smallest quarter of the year, it still hints the challenges ahead. Continued economic and political challenges in our operating geography negatively impacted the consumer sentiment. However, we benefited from our diversified structure and the growth in certain segments mostly compensated for softer results in others." commented Mr. Robin Goetzsche, Anadolu Efes CEO and Efes Beer Group President.

"We managed to deliver volumes in line with our expectations for total beer group as well as CCI, while outperformance of expectations in Russian and Kazakh beer operations balanced softer segments. I am particularly happy with the margin improvement in international beer operations, which is the result of continuous efficiency improvement and prudent expense management due to macro-economic challenges. Better than expected performance of international beer operations in the first quarter compensated the softer than expected performance in Turkey beer, therefore we are cautiously reiterating our full year guidance both for beer operations and for Anadolu Efes consolidated. The challenging operating environment helped us to gain agility and resilience; traits which we are fully committed to maintain by initiatives such as working capital management, revenue management, expense and efficiency improvement. Our short term priorities continue to be gaining market share profitably in Turkey, gaining market share in segments where we are under-indexed in Russia, focusing on premiumization, pricing strategies and maximization of FCF generation."

S U M M ARY F I N ANC I ALS

Consolidated (million TL) 1Q 2015 1Q 2016 Change %

Volume (mhl) 17.1 16.5 -3.2%

Net Sales 1,931.0 1,933.2 0.1%

Gross Profit 788.8 732.0 -7.2%

EBIT (BNRI) 85.5 47.0 -45.0%

EBITDA (BNRI) 277.1 252.9 -8.7%

Net Income/(Loss)* -212.0 60.3 128.4%

Change (bps)

Gross Profit Margin 40.8% 37.9%-298

EBIT (BNRI) Margin 4.4% 2.4%-200

EBITDA (BNRI) Margin 14.3% 13.1%-127

Net Income Margin* -11.0% 3.1%1,409

* Net income attributable to shareholders

Beer Group (million TL) 1Q 2015 1Q 2016 Change %

Volume (mhl) 4.7 4.0 -15.7%

Net Sales 728.0 632.0 -13.2%

Gross Profit 379.1 315.4 -16.8%

EBIT (BNRI) 15.0 6.2 -59.0%

EBITDA (BNRI) 116.0 97.8 -15.7%

Net Income/(Loss)* -164.4 47.6 129.0%

Change (bps)

Gross Profit Margin 52.1% 49.9%-216

EBIT (BNRI) Margin 2.1% 1.0%-109

EBITDA (BNRI) Margin 15.9% 15.5%-4 6

Net Income Margin* -22.6% 7.5%3,013

* Net income attributable to shareholders

Turkey Beer (million TL) 1Q 2015 1Q 2016 Change %

Volume (mhl) 1.5 1.2 -18.6%

Net Sales 339.8 283.4 -16.6%

Gross Profit 211.4 157.4 -25.6%

EBIT (BNRI) 72.7 23.4 -67.8%

EBITDA (BNRI) 109.5 65.7 -40.0%

Net Income/(Loss)* -56.1 40.3 171.9%

Change (bps)

Gross Profit Margin 62.2% 55.5%-668

EBIT (BNRI) Margin 21.4% 8.3%-1,313

EBITDA (BNRI) Margin 32.2% 23.2%-903

Net Income Margin* -16.5% 14.2%3,072

* Net income attributable to shareholders

EBI (million USD) 1Q 2015 1Q 2016 Change %

Volume (mhl) 3.2 2.7 -14.4%

Net Sales 156.8 116.9 -25.4%

Gross Profit 67.5 52.7 -21.9%

EBIT (BNRI) -16.8 -2 .2 86.8%

EBITDA (BNRI) 8.9 14.3 61.7%

Net Income/(Loss)* -36.0 7.4 120.4%

Change (bps)

Gross Profit Margin 43.0% 45.1%204

EBIT (BNRI) Margin -10.7% -1.9%883

EBITDA (BNRI) Margin 5.7% 12.3%661

Net Income Margin* -23.0% 6.3%2,929

* Net income attributable to shareholders

CCI (million TL) 1Q 2015 1Q 2016 Change %

Volume (m u/c) 218.4 221.8 1.5%

Net Sales 1,203.0 1,301.3 8.2%

Gross Profit 410.7 417.5 1.7%

EBIT 74.5 44.3 -40.5%

EBITDA 161.7 155.1 -4.1%

Net Income/(Loss)* -90.7 29.4 132.4%

Change (bps)

Gross Profit Margin 34.1% 32.1%-205

EBIT Margin 6.2% 3.4%-279

EBITDA Margin 13.4% 11.9%-153

Net Income Margin* -7.5% 2.3%980

* Net income attributable to shareholders

B EER G ROU P

Turkey: Turkey Beer (million TL) 1Q 2015 1Q 2016 Change %

Volume (mhl) 1.5 1.2 -18.6%

Net Sales 339.8 283.4 -16.6%

Gross Profit 211.4 157.4 -25.6%

EBIT (BNRI) 72.7 23.4 -67.8%

EBITDA (BNRI) 109.5 65.7 -40.0%

Net Income/(Loss)* -56.1 40.3 171.9%

Change (bps)

Gross Profit Margin 62.2% 55.5%-668

EBIT (BNRI) Margin 21.4% 8.3%-1,313

EBITDA (BNRI) Margin 32.2% 23.2%-903

Net Income Margin* -16.5% 14.2%3,072

* Net income attributable to shareholders

In the first quarter of 2016, Turkey beer operations' domestic sales volume was 1.1mhl. The beer market was down in the first quarter of 2016 due to higher prices reflecting excise tax increase of 15% in January, negative consumer sentiment mainly caused by the unrest and lower tourism activity. Both the market's and our own performance were softer than expected in this seasonally small quarter. Including exports, total sales volume of Turkey beer operations was 1.2mhl in 1Q2016, down from 1.5mhl in 1Q2015.

In line with our core strategy of investing in our brands, we have made several new launches including Efes Pilsen Long Neck RB, Efes Xtra RB, Amsterdam Navigator Shot and 55cl Efes Pilsen Color Series in the first quarter of the year, prior to the peak season. Market investments also continued during the quarter.

Shelf prices increased at the beginning of the year to reflect the increase in excise tax and the rise in certain portions of the cost base, which led to higher net sales revenue per liter year on year. Total net sales revenues of Turkey beer operations was TL283.4 million in the first quarter of 2016.

Cost of sales per liter (excluding depreciation) increased by 17.9% in 1Q2016 vs 1Q2015 mainly because of higher fixed costs as well as higher F/X-based raw materials prices due to weaker TL. As a result,gross profit declined to TL157.4 million with a margin of 55.5%.

Operating expenses as a percentage of net sales revenue increased mainly due to higher fixed selling and G&A expenses associated with lower volumes.Accordingly, in the first quarter of 2016, EBITDA (BNRI) of Turkey beer operations was TL65.7 million compared to TL109.5 million in 1Q2015 with a margin of 23.2% vs 32.2%, respectively.

Positive impact of stronger TL vs USD and EUR in the first quarter of 2016 vs year-end 2015 resulted in a net F/X gain of TL30.2 million thus Turkey beer operation's net profit was reported as TL 40.3 million compared to a net loss of TL 56.1 million in 1Q2015.