Page 80 - TURKRptAug20

Fitch expects an 11% sales volumes decline and a 2% revenue contraction in 2020 for CCI, mainly driven by the pandemic's impact on 'out-of-home' sales channels, including the hotels, restaurants and catering channel, vending machines and leisure venues.
These channels also account for a large part of the more profitable 'instant consumption' packages, and the contraction of these sales is likely to add additional pressure on price mix and profitability in 2020.
For CCI, the greatest hit will be in Turkey (2019: 47% of revenue), where out-of-home consumption accounts for nearly 25% of sales. However, CCI has a much lower exposure to these channels in its international segment (less than 15%).
From 2021 we expect the company to return to a funds from operations (FFO) margin of around 15% over the rating horizon, which would allow the company to grow its dividend payments if no M&A opportunities appear.
On May 28, CCI distributed 25% of its 2019 profit as cash dividends, lower than the previously planned 47% due to a dividend cap introduced in April.
As of end-March 2020, 81% of all CCI's debt, as well as the prices for a relevant proportion of raw materials (approximately 30%), were denominated in hard currencies. This contrasts with revenue generation, which is mainly in emerging markets' local currencies. The combination of these elements results in high FX risks that are, however, well balanced by CCI due to lower dependence on a sole country (Turkey) as well as 70% of cash held in hard currency (2019: 66%).
80​ TURKEY Country Report​ August 2020 ​ ​www.intellinews.com