coca cola icecek sanayi\'s (cocal) ceo burak basarir on q4 2018 results - earnings call transcript
Coca-Cola Icecek Sanayi, ADR (OTC:COCAL) At 8: 00 a. m. on February 28, 2019, ETCompany\'s meeting on Earnings Call for Q4 2018, the investor relationbankak Basarir-Chief Executive Officer, vikavramenko, chief financial officer, was called participipantshanzade Kilickiran-JPMorganThomas Vester-LGM demitrtas, welcome to coca. Coca-Cola conference call for 2018 results all year round. Sir, I will give it to your master now. CEO Burak Basarir; Mr. Chief financial officer Andriy Avramenko; Ms. Yesim Tohma, head of investor relations. Ms. Yesim Tohma, please proceed. Thank you. Good morning, ladies and gentlemen, good afternoon. Welcome to our live webcast throughout 2018. Today, Burak Basarir, our CEO, will give a brief introduction to our operations. Our chief financial officer Andriy Avramenko will then share the financial review with you. According to the guidance of 2019, including the comments of our CEO, we will start the Q & A session. Please note our warning statement before we start, this call may contain the following Review management reviews, including forecasts, which should be considered in conjunction with this presentation and the warning language included in our earnings release. We have a copy of the earnings release and financial statements on our website. cci. com. tr. Now let me transfer the call to Sir. Basarir. Please proceed, sir. Thank you, Yesim. Good morning and good afternoon. thank you for attending our conference call today. We are pleased to have another year of high quality growth and have achieved solid results under our guidance. As our revenues continue to be ahead of our numbers, EBITDA is ahead of our revenues, and we have achieved the highest net income and EBITDA growth over the last six years. Our portfolio strategy and revenue growth management plan, as well as strict financial management, also enable us to expand the profits of EBIT and EBITDA. Again, a-we ended the year with a steady free cash flow in the context of a continued focus on working capital efficiency and prudent capital expenditure. Let me go to the next page. Look at our sales growth in CCI. Both Turkish and international businesses have achieved strong growth of 2019, while our international business has surpassed Turkey for the first time. In Turkey, due to the increase in sparkling categories, we recorded the highest growth since 2012. In our international business, Pakistan and Kazakhstan are the main drivers of our volume growth. On the basis of the merger, we generated 77 million unit cases of incremental quantities. Let me move to the next page and then let\'s take a look at the category show. All categories except Nonready-to- In 2019, the growth of loose tea drink tea was realized. The sparkling category grew by nearly 7%, converting to 59 million unit cases of incremental volume. We are pleased to see the accelerated growth of Turkey\'s economy. The category has grown by 7% in Pakistan, surpassing industry growth. Stills grew by 12%, mainly due to strong growth in Turkish and Kazakh iced tea. Backed by increased brand investment and supply, iced tea grew by 20% in Turkey. In Kazakhstan, iced tea has grown by nearly 40%, reaching a leading position in the market. Driven by the immediate consumption plan, the water category has grown by 6%. Finally, non-ready-to- The amount of tea drinking dropped by 1% due to our pricing strategy and price increases. In the fourth quarter, Sparkling declined dropped 2% to ride 3%. Stills fell by 5%, an increase of 17% in the same period in 2017. Let me go to page 7 and now let\'s take a look at our business in Turkey. In a challenging year, we have maintained high quality growth in Turkey. Throughout 2018, we faced adverse factors including special excise duties, foreign exchange fluctuations and a sharp deterioration in consumer sentiment. Nevertheless, we have achieved the highest annual growth rate since 2012, maintaining a sustained momentum in our sparkling category. Our successful brand innovation, increased availability of the portfolio, and accelerated cooling investment play a key role in these results. With our revenue growth management capabilities and continued focus on effective cost management, volume growth has also translated into a healthy financial position. The sparkling category has accelerated its growth by nearly 6%. Coca- Coke sugar-free has made an important contribution to the overall category performance with more than 30% growth. The part of sugar- In the sparkling category, the free part is almost 7%. The proportion of iced tea packages in sparkling categories has also maintained an upward trend, reaching 23%. The release of coca in 2018 Cola coffee, Fanta C and Fanta lemonade are other successful innovations that support the growth of sales in this category. In 2018, Stills increased by 6%, mainly driven by the category of iced tea. The relaunch of the Fuse Tea brand followed by effective promotion and accelerated investment, providing a significant market share growth while the iced Tea category grew by 20%. In 2019, the types of water increased by nearly 8%. The iced tea package has driven sales growth, with sales increasing by 2 percentage points in 2019. Non-ready-to- As I said, drinking tea is the only category contracted in 2018, mainly due to higher prices and increased profitability in our category. Looking ahead, we will continue to address the burden capacity problem in Turkey while maintaining a focus on value through portfolio, category profitability and efficiency. Let me talk about the highlights of the Middle East and Pakistan. In Pakistan, sales grew by more than 7% in 2018. Macroeconomic deterioration and the devaluation of the rupee led to a slowdown in private consumption in the second half of the year. Nevertheless, in the context of continuous improvement in market execution, we have achieved the above industry growth in the sparkling category. Our new production plant in faisalbard was put into production before the peak season, which also contributed to our business growth. Volume across the Middle East increased by 2% in 2019. Iraq\'s economy grew by nearly 4%, and profit margins doubled. Digital growth in Coca-Cola Trademark brand cola. The political tensions caused by the elections in July and the ongoing security problems have had some adverse effects on our actions, especially in the second half of this year. As we mark the tenth anniversary of Pakistan\'s operation in 2018, we are encouraged by the progress made. Our production capacity and sales volume have more than tripled since 2008, and over the past three years we have built two greenfield factories. We keep improving our route. to- Market efficiency in Pakistan and focus on improving our availability. Over the past 10 years, we have gained a lot of market share in the sparkling category, and by the end of 2018, our market share reached 42%. We continue to invest in brand assets by winning consumer events like Coca-Cola Studios. Considering the great potential of the flavor sparkling category, we also focus on the growth of Sprite and Fanta brands with targeted marketing campaigns. We believe that the fundamentals of Pakistan remain intact despite their brief nature. Long term volatility, the country provides a huge opportunity for the growth of the NRTD market. Let me move to Central Asia. The region grew by 13% in 2018, with all of our markets achieving double growth except Turkmenistan man With the significant expansion of EBITDA\'s profit margin, digital growth. Our market execution and cooler investments have driven macroeconomic growth with the support of rising oil prices. Ha achieved 14% growth, sales reached the highest level, and gained a huge share of quantity and value in the market. With successful consumer events and promotions, the sparkling category has grown by more than 11%. It is also worth mentioning that the sales of iced tea increased by nearly 40% year on year, leading the market in Haida. During 2018, the release of new products such as Fanta C and Sprite cucumbers also contributed to our sales growth. Azerbaijan achieved an astonishing 30% per cent growth with the contribution of all major categories, becoming the second largest and fastest growing country -- Countries planted in coca Coke system in 2018 So, let me call André now and show us the financial situation. Thank you. Shevchenko AvramenkoThanks, Barack. The results of 2018 again demonstrate the growth of quality. Our combined net income increased by 27%, mainly due to the operation of Turkey and the positive foreign exchange impact on our international sector. On an FX- On a neutral basis, consolidated net sales revenue increased by 13% per cent. Strong top line growth coupled with effective management of raw material costs and operating expenses provides an expansion in gross margin, EBIT and EBITDA margins. We ended the year with a net income of 0. 327 billion, representing 37. Compared with 2017, it increased by 5%. Through higher operational profitability and a positive impact on net investment hedging. Due to seasonal factors, the fourth quarter continued to provide the lowest EBIT and EBITDA contributions for annual performance. Compared with last year, the increase in raw material costs, driven mainly by the depreciation of PET resin and Turkish lira and Pakistani rupee, as well as high distribution, sales and marketing costs, led to a decline in profit margins. Move on page 12. Our consolidated unit case net sales revenue increased by 6% on FX-neutral basis. The main reasons for the increase are Turkish and Central Asian operations. Our gross profit per unit case increased by 8%, reflecting a strong increase in net income per unit case in Turkey and focusing on cost management. In Turkey, effective hedging, cash designation mechanisms and product restructuring significantly offset the impact of input costs and depreciation of the Turkish lira on economic growth. In international business, the increase in the price of packaging materials (I . e. PET Resin) has had some negative impact on the overall profitability. In addition to the higher gross profit after the merger, operating expenses as a percentage of revenue were 120 basis points lower than 2017, compared with increased efficiency in both Turkish and international operations. As a result, EBIT per unit case increased by 20% per cent in 2018. Let\'s go to the next page, 13. Now, let\'s briefly review the investment costs and related foreign exchange exposure. In 2018, the price of aluminum and resin showed an upward trend, while the world sugar price decreased compared with 2017. In Turkey, where the sugar market is regulated, prices are higher than in 2017. Please note that in Turkey, there has also been a recent regulation on HFCS with high fructose corn syrup, which provides for quotas that will be reduced from the current 5% to 2. 5% to September 2019. We do not expect this new regulation to have a significant impact on our operations, as we have been continuously reducing the use of hydrogen chloride for the last few years and have planned our procurement accordingly. 2019. we have begun to hedge the demand for raw materials. So we hedge 100% of our sugar demand in unregulated markets. For aluminum and resin, we hedge the demand of 66% and 58% respectively. In addition to managing the risks associated with the price of raw materials, as we communicated earlier, we also designated a portion of hard currency cash to manage our foreign exchange risks associated with Turkish raw materials. On page 14, let\'s talk about net income. Due to EBITDA growth, our income has increased by 0. 492 billion and tried the positive impact of 0. 288 billion net investment hedging, which not only offset the adverse impact of the Turkish lira on net foreign exchange losses caused by the depreciation of the United StatesS. dollars. On the next page, let me take a look at our leverage metrics now. Our net debt position fell from $0. 555 billion in 2017 to $0. 5 billion in 2018. We have repaid $0. 6 billion in debt and continue to create healthy cash levels. Therefore, our current net debt is reduced by $0. 152 billion compared to 2016, which is consistent with our efforts to peel off the balance sheet. Our net debt to EBITDA is 1. By the end of 2018, it was four times, and it was even lower on the foreign exchange market. neutral basis. Finally, our net interest coverage is 9 times lower than in 2017 due to participation in cross-trades Currency swap transactions carried out in 2018. Go to page 16 As we continue to reduce our net debt positions, we also continue to manage our foreign exchange exposure and reduce net income fluctuations. After taking two important steps in 2018, we now have a lower U. S. US dollar exposure compared to last yearend 2017. First, we hedge $0. 15 billion in debt by participating in cross-trades. Currency swap in January 2018. Second, the implementation of net investment hedging and accounting of US $0. 281 billion began in April. This has had a positive impact on our net income in 2018 of 0. 288 billion per cent. At the same time, we continue to hold most of our cash in hard currency and monitor growth opportunities to reduce bottom-line volatility. If we look at the maturity of our debt, the foreign repayment of US $0. 5 billion in European bonds and US $100 million in US bondsS. Private placement, we didn\'t have a decent return until 2024. By the end of 2018, the average term of our combined debt portfolio was four years. Cash Flow to page 17. I would like to summarize the key indicators on cash flow. In 2018, the net working capital to sales ratio maintained a downward trend, although someoff items. We expect this ratio to normalize at a level of 5% to 6% in the medium term. Our sales capital expenditure is realized at 8: 00. 1%. The increase in the ratio of capital expenditure to sales is mainly due to the accelerated cooling of investment and the impact of some foreign exchange exchanges. Of the total capital expenditures, 38% were related to Turkey and 62% were related to international operations. High operating profitability, combined with effective net working capital and prudent management of capital expenditures, brings free cash flow to 0. 73 billion this year. Now, let me talk about-call Burak and ask for our 2019 guidance and closing remarks. Thank you, Andre. Looking forward to 2019, we expect the macroeconomic environment to be unstable in the coming year, as well as financial, political and security challenges. To be honest, nothing new. However, as the population grows and the economy grows and the rate of NRTD consumption per capita decreases, our market continues to provide us with tremendous growth opportunities. Therefore, we expect to achieve sales growth of 3% to 5% on a comprehensive basis. Sales in Turkey are expected to be flat at 2019, and sales in the international market are expected to grow by 6% to 8%. We expect net income in the foreign exchange market to grow by 16% to 18% The neutral base and consolidated EBITDA margin improved slightly. We expect our capital expenditure-to-sales ratio to remain at 7% to 8% and have the opportunity to maintain our net debt --to-EBITDA below 1. 5 times. Finally, we are pleased that we have guided quality growth in a challenging year. Despite major challenges, our operations in Turkey have again recorded stable figures. We are encouraged that our share of iced tea has grown rapidly and rapidly. We will continue to focus on the affordability and value creation of Turkey\'s economy. Business in Pakistan and Central Asia achieved strong quantitative growth, and we see strong growth in Turkish and international operations translated into profit growth. As we begin to implement the 2019 plan, we will continue our rigorous financial management and strategy, focusing on revenue growth management, productivity growth and cost reduction, we believe this is critical to ensuring sustainable, high-quality growth. We are confident to translate challenges into opportunities that create value for all stakeholders. We will move further and take more steps to transform and equip the necessary qualities for CCI to achieve our vision and invest in our employees to develop influential leaders. Now I think we can open the floor for Q &. Thank you, operator. Question-and- Thank you. Ladies and gentlemen, let\'s start asking questions now. and-answer session. [ Operation instructions] We have a question from [indiscernible] Investment in Deniz. Please continue. Unidentified analyst, thank you for answering the question. Actually, I have a few questions. Your guidance is about 13% to achieve real growth through pricing and mixing. Can you elaborate more on how much of this will come from the mix in pricing and assumptions? In major markets like Turkey and Pakistan, how much can you raise the price? My second question isup on that. Have you raised the price so far this year? My last question is about Pakistan. Can you talk about the situation there? Have you seen any disruption to your operations and consumer sentiment? Thank you. Burak BasarirYes. This is a good intention for you guys, and I hope everyone will have a good time in 2019. Let me start with your first question, what is the main pillar of our 18% revenue growth. Obviously this will come mainly from the price. Price, meaning, first, price increases; Second, there is a disciplined discount management in the market. Therefore, most of the increase in income can be associated with the increase in market prices. Second, have we raised the price? Yes, we have already taken some measures of price increase in almost all of the business, first of all, because normally, we will take measures of price increase in the first quarter, maybe early in the second quarter, because it is almost impossible to raise prices further in the middle of the peak season. The third question is the situation in Pakistan. I think you are referring to Pakistan and India. We saw it on TV, right? Nothing will affect our business now. So our team is on the ground. We\'re selling our boxes. The whole incident was limited to Kashmir. It is clear that there are talks in this country, but we have not seen any negative effects. The only unfortunate thing is that the entire airspace is now blocked, so we won\'t be able to fly in or out of Pakistan until 18: 00 on March 1. So-but I personally think-I personally think it will be resolved soon and I don\'t think it will affect our business. I hope this will answer your question. Analysts of unknown reasons thank you The next question comes from Hanzade Kilickiran of JPMorgan Chase. Please continue. Hanzade KilickiranAnd Burak, thank you for your introduction. We appreciate that your financial year data looks very good, but I mean, it looks like this-this is mainly driven by Turkey\'s very strong performance in the first nine months of its weak market outlook and foreign exchange movements. So I just wanted to know, I mean, we were also aware of the slowdown in the fourth quarter. So what should we look at the 2019 slowdown in the fourth quarter? Because I can see that you are still very positive about the international market growth in 2019, but we don\'t see that in the fourth quarter. Can you explain what happened in the fourth quarter? Finally, regarding Pakistan, you did not mention the 4Q trend in Pakistan. But in your notes we see that you are doing some discounts. Are these discounts for dealers? Is there any competitive pressure in Pakistan? Thank you. Burak BasarirYes. Hi Hanzade, I mean, let me try to give you a quick reminder of what happened in the fourth quarter. I mean, the results we saw in the fourth quarter were not surprising to us because we had a high frequency of cycling in 2017 and we also took some price increases in the fourth quarter, basically after high inflation and currency depreciation. So I mean, the number you see is an expected number and a very high base. Let me tell you privately how we started 2019. We started in Turkey 2019 better than we expected. But it\'s also the smallest few months in our business, so it shouldn\'t show anything. But we haven\'t seen any concerns about 2019 for the time being. So I will not worry about the fourth quarter figures, nor will it, as my guidance has pointed out, think that the fourth quarter will lead to a more difficult 2019, and that Turkey\'s growth in the first line will be flat. Our guidance is flat and hopefully we can beat our guidance. 2019 is slower than 2018. That’s a fact. But in terms of quality growth, we lock in and strive to achieve quality growth in our operations in Turkey. On Pakistan, I mean, discounts are a long-term challenge for us. So we have done a lot in Pakistan in the last 10 years. We fixed our supply chain first and then our back office. We have done a lot of new things in business. It\'s time to restructure and create the right one. for- Organization of purpose. So we basically rationalize the route. to- Now the market. Nothing we do with discounts comes from competition, but because of the channel structure itself. So we\'re trying to get rid of worthless things. Add elements to the value chain. e. Some wholesalers, some big guys who don\'t reflect the discount on shelf prices. So all this -- the route --to- We are working on market projects in Pakistan, but there is no point in competition. As I said in my notes, we gained market share in Pakistan in 2018. Burak, I know this should lead to a better profit trend in Pakistan when you avoid wholesalers, right? I mean, this happens eventually in Burak BasarirWell, but it\'s not the easiest thing to do, because there are a lot of beneficiaries in the value chain, let me say that. It\'s the Pakistani market, right? So we are trying to constrain the entire market, the entire dealer network. But in the end, you will see a higher net income for several reasons. First, the mix will improve with better sales and distribution. Second, the discount will be lower as we will remove some non-necessary parameters from the routeto-market. Third, the quality capability of our sales team will be significantly improved. But I mean, it takes time for these projects. . . Thank you. thank you. Operator[ Operation instructions] We have a problem with Thomas Vester from LGM Investments. Please continue. Thomas VesterHi and Burak congratulated the results. I have a few questions. I mean, first of all, according to your guidance on net debtto-EBITDA level. I mean, it looks-I mean, the cash you generate and the dividends you disclose to be paid, and the organic and foreign exchange -- The basis of neutrality, it-I just wanted to see if it shouldn\'t be much lower, would you get all the other things equal? Second question, I just saw some news about your CEO at Turkmenistan man, very sad if they are true. I don\'t know if you can comment on this. They may not be true, but the news has just emerged. Then, in terms of volume growth, there also appears to be quite strong volume growth, which is also the source of international operations at the end of the year. What do you expect? What do you expect? Is this trend being pushed forward in Kazakhstan, Azerbaijan? Because I mean, Pakistan\'s rebound in this has slowed. I mean, how do you get the numbers for these volume growth in the international arena? The last question, the fourth one is, I mean, From the questions raised on the fourth quarter margin, this is because it is quite weak. I\'m not sure if I understand your point of view because you raised the price, I mean, increasing the price will lead to a drop in sales. If any, I think it\'s surprising that in the context of your sharp price increase, sales in Turkey in the fourth quarter remain good. So I mean, obviously people might be a little tempted to think maybe you already, I don\'t know, I mean, push a little bit of profit here to 2019 I mean, but-I mean, in the fourth quarter, there\'s definitely more to these margins, and I\'m obviously not getting it now. Burak BasarirYou just answered this question. So I will answer the second and third questions and Andre will answer the first and last questions if you don\'t mind. The second question about our GM in Turkmenistan man. Unfortunately, he has just died. Rest in peace. Thus, the entire criminal case was carried out in conjunction with the turkmann authorities. So unfortunately, we cannot comment on this incident. I hope you understand. But unfortunately, our GM died in Turkmenistan man. The news is true. The third question is our international action. So when you look at international action, let me start with the Middle East question. I can\'t even say anything about Jordan. Jordan will recover its momentum. The good news is that the Jordanian government has reduced the special consumption tax by 5%. We hope it will help, but Jordan\'s business is small. Iraq, our main brand, Coca Coke, Fanta and Sprite have seen double-digit growth. Now the problem in Iraq is the crystal brand, which is the B brand we got when we acquired our Southern Business Al Waha business, which is not money --making brand. So we\'re basically just trying to limit our push to the market and manage our discounts. So basically, Brand B obviously affects our first-line sales growth, but it doesn\'t affect our profitability. Second, the amount of water, water is pure goods. So when the market finds the right price, you can sell as much as you can. Your ability is limited. There is a rule in our company. We will not sell any products, any SKU will cause loss. This is also a limiting factor in Iraq\'s economic growth. In fact, the amount of water in this country has decreased. Let me move to Central Asia. The work in Central Asia has been excellent. The second place is ha, Ji, ah The fastest growing countries in the worldCola system. Unfortunately, the only problem due to the currency issue is in Turkmenistan man. So no conversion. We have a lot of turk Mante in our bank, but we can\'t convert Mante into dollars, so we often stop producing. So we-and, of course, we have seen a lot of shortages in our top-level growth, which is affecting the world-the volume growth consolidated in Central Asia. So I\'m not worried about Central Asia. As I said, the only problem is the Turkmenistan macro problem that affects our overall business. I think we have-I have talked about Pakistan in detail. Last year, Pakistan\'s currency fell by 26%, or about 27%. So with elections, consumers are very depressed. But when you look at it from a relative perspective, we have gained market share in Sparkling, and we are the first time Pakistan has ranked first in Sparkling. Therefore, we are the first company in the overall business of Pakistan. As a result, our overall market growth in 2018 exceeded expectations. So we see something macro in the international market, the usual thing, but you need to read the numbers that don\'t include something. I mean, obviously, you don\'t have the data. However, the water and crystal brands of brand B are affecting high-end growth. In Central Asia, Turkmenistan man is a negative contributor to the number of growth figures. Pakistan is a macro problem that the country is dealing. So it\'s pretty public anyway. So, if you don\'t mind, I\'ll leave first and fourth place to Andre Thomas. Please give me an Delhi. So I started with debt. to- EBITDA ratio guide. I think we are satisfied with the following 1. 5 times. We are very satisfied with this in terms of organic operations. One reason why we-it won\'t drop sharply is that we don\'t have particularly high leverage. From our point of view, this is a comfortable lever. Second, you have seen an overview of our debt repayment on page 16. We the most debt is regular of we will be able to in 2024 2023 pay. This is the essence of our debt situation. So our main focus is not on reducing the debt itself, but on finding opportunities in other tools for swap transactions to make sure we move US debt outS. Dollar debt and euro debt become local currency debt, preferably debt with favorable interest rates. So this is our main focus on debt. Therefore, we do not intend to reduce our debt significantly. to-EBIDTA ratio. Now to the fourth quarter. Actually, as I mentioned earlier, how did the currency depreciate, right? Some local costs calculated in local currency tend to be much faster than we can accept pricing. So we need the market to adjust in reality. So when we start to raise the price, there will be a late stage. So we are already dealing with higher costs. On the other hand, we don\'t have pricing. The second factor, again, is very practical on the ground. When the price-when we take the price, the first is the decline, in the last quarter, usually the market already knows, the intermediary will make the purchase at the previous price level, etc. Then we have a gap after the price rises. So this has an impact on the fourth quarter, except that the fourth quarter is a lower market, a lower month, etc, which affects our profit margin in the fourth quarter. But, as Burak says, there is nothing particularly to worry about. We did not see this continue in 2019. Thomas Worcester. Okay, great. It\'s in Turkmenistan man. I mean, I mean, I appreciate your comments on the case, but are you worried about something that might be wrong in the company? And then just a follow-up Net debt has also risen. to-EBITDA. I\'m afraid I still don\'t understand. I mean, you comment that you expect the capital expenditure to be 7% to 8% last year. You expect a small drop in working capital, but not too much. But that means-I mean, you still expect to generate a lot of free cash flow in 2019, I guess, right? The business of Burak BasarirOn, Thomas, Turkmenistan man in Burman is nothing to worry about. I mean, we have partnerships with the government and we have partnerships with some local shareholders. Therefore, there is nothing to pay attention to in our business except the current macro situation. Therefore, due to the monetary constraints in the country, we are basically unable to continue our business, that\'s all. Andry avrinko Net debt-to- Yes, we will continue to create cash. You\'re right. This is our view of the future, especially 2019. As I explained, the profile of debt repayment is almost fixed, so our flexibility to reduce debt is very limited. Thomas Worcester. Okay, great. If I can, have another drink on Uzbek. I appreciate you for not posting any announcements to the market, but what can you say in terms of whether you feel it is moving in the right direction or not? I mean, we know too clearly that they managed to place or withdraw from European bonds for the first time. Maybe it gives us more breathing space. I don\'t know, but is it going in the right direction or do you feel that progress is a bit stagnant? Burak BasarirI thinks-I will be very open here. In a sense, we don\'t have any news on our side-we were picked by Coca -- Coca-Cola participated in a-as the bidders they proposed and favored in the process of selling shares in Uzbek bottled bottles, most of which were owned by the government. So the government-we engage with the government. However, this is a process of privatization. This is a government. Management process. So it takes time, and it\'s a fairly unpredictable process, especially in that part of the world. So I won\'t read anything negative or positive in it. It is a complicated process for countries like Uzbekistan to start privatizing. Although we are very encouraged by European bonds and other news from Uzbekistan. The movement in the environment encouraged us quietly. Although, in our case, I will not make any positive or negative comments at this time. Okay, Thomas Worcester. Thank you so much, Burak, again for doing well in very difficult times and doing well in 2018 Games. Thank you, Thomas. Thank you. Our next question comes from [indiscernible]from Barclays. Please continue. Thank you for your introduction, the unidentified analyst. I just had a problem with the hedging approach. So in terms of hedging, you\'re clearly in a 2019 position. Just as we are through this year, is your goal to keep hedging at this level? Then it is also the cash designation for foreign exchange purchases. So this year, you did that for $3. 95 to the lira. I was just wondering if you would do something similar for 2020. Burak BasarirYes. First of all, yes, in terms of currency hedging, we have been looking for opportunities to convert US currencies. S. Dollar debt and euro debt are converted into local currency, provided the price is correct in total. If we find something, we will do it and we will report it accordingly. So this is the focus of our attention, and we are also limited-mainly cost currency swaps. Nevertheless, hedging is small for accounting processing, not hedging for basic tools. But now on the currency name, as you can understand, the currency name is great for a currency -- Volatility, uncertainty, etc. That\'s why we did it in 2018 and we spent £ 2019 on it so everyone can see predictable comparable profits, right? Now, if the currency we are dealing with is moving in one direction on a multi-year basis, it needs to consider whether we should specify it, because it is more of a comparable tool, not the real protection of money losses. So in any case, we keep the currency-foreign currency on our balance sheet. So we are evaluating whether 2020 will do this, and the quantity. We may communicate what we will do in future events. But we want most of our cash to be on the balance sheet in foreign currency, hard currency, and for us this is the best way to reduce the net exposure of foreign exchange debt. Operator[ Operation instructions]Our follow- The problem comes from Hanzade Kilickiran of JPMorgan Chase. Please continue. Is it possible for Hanzade KilickiranIs to break down international growth guidelines at the national level in 2019, such as what kind of growth do you look for in Pakistan and marine countries and the Middle East, respectively? Unfortunately, we did not give detailed guidance. I\'m sorry. I\'m Hanzade KilickiranBurak and we know that in 2018, different countries grew by 20%. So do you think Pakistan\'s growth rate is close to 10% in order to achieve 6% to 8% growth on the international front? I mean, that\'s what I want to understand. In 2019, which market will drive this growth? Or will it be an ocean country? What Burak BasarirI means is that we expect 2018 performance in any remote country, so obviously, except Turkmenistan man, so . . . . . . Operator[ Operation instructions] We have an issue with the investment from Gemar Demirtas Ata. The problem with Cemal DemirtasMy is related to the final demand in the domestic market. Obviously, in January and February, while this is the slowest few months, it may give some indication if you have any indication. First, did you raise the price in early January or February? This is my first question. The second is related to the retail channel you are using. Do you see any sports? Overall, do you see traditional to organized sports on these counters? Is there any impact on your overall strategy in the domestic market? In this sense, how do you pursue trends? Burak BasarirI means that unfortunately I am not able to make a formal comment on the figures for January and February. But as I said in my opening remarks, the January data is better than we expected. I can only comment on this level. In terms of pricing, we have been adding some prices on different SKUs so that we do not add one price to all SKUs. We just pick certain packages at some point in the month. So we take different price increases and execute them in the market. In terms of channel transfer, we do not see any major channel transfer from single-Organization trade to discounts or from traditional channels to organized trade or similar. All channels are now performing equally, includingPrerequisite channel. So there\'s nothing to worry about. All channels now perform the same in the local market. And the U. S. I think, about sellingin and sell- There are no numbers so we did not build any inventory in any of our customers. So sell-And sales- The number of Out is almost equal. So whatever we see, it\'s basically for our consumers. Thank you. Operator[ Operation instructions] We have no further questions. Dear speakers, please make a summary at the end. Hello everyone, thank you Burak BasarirWell. Thank you for joining us on the phone and it is always an honor to run this company. So again, we are fully committed to our business. As I said at the opening ceremony, our location is full of opportunities and volatility. So we promise to have another great year in 2019 and hope to see you at other times. Thank you very much. have a good time. Thank you. This is the end of today\'s conference call. Thank you for your participation. You can disconnect now.