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Ladies and gentlemen, welcome to Coca-Cola First Quarter 2020 Financial Results Conference Call. I will now hand over to your host, Mrs. Çiçek Özgünes, Investor Relations and Treasury Director. Please, ma'am, ahead.
Thank you. Good morning and good afternoon, ladies and gentlemen. Welcome to our first quarter 2023 results webcast. I'm here with Burak Basarir our Chief Executive Officer; and Andriy Avramenko, our Chief Financial Officer. Following Mr. Basarir, register our revenue's presentation, we will turn the call over for your questions. Before we begin, please kindly be advised of our cautionary statement. The conference call may contain forward-looking management comments, including projections. This should be considered in conjunction with the cautionary language contained in our earnings release. A copy of our earnings release and financials are available on our website. Now let me turn the call over to Mr. Burak Basarir. Sir?
Thank you, Çiçek. Good morning, and good afternoon, everyone. It's a pleasure to be speaking with you today. Thank you for joining our webcast. Andriy and I will take you over through our first quarter operating highlights, and then we will turn into a Q&A session at the end of the presentations. As you would remember, we announced our 2023 guidance early in the year, which included certain assumptions and accounting for many risks. However, a lot of change since then. Turkey was hit by one of the country's most catastrophic earthquake in early February that displays over 5 million people.
The macroeconomic situation in Pakistan got more challenging with the government taking additional fiscal measures, including tax increases to comply with the IMF program, which is still being negotiated. Access to hard currency remains limited in the country and the inflation hit 50-year high, while the currency devalue by 25% since the first quarter. SCCI rather than using our energy 100% on the existing challenges with an agile mindset and decades of experience managing volatility, we are well equipped to respond and adapt our business quickly to new operating conditions and pursue opportunities.
That is what we need and what we did in the first quarter, and we modified our plans to sustain our profitable growth under the current environment. Benefiting from the geographic diversification of our business, we are confident that we can deliver in line with our earlier expectations and reaffirm our full year guidance. We are pleased with our performance for the first quarter, delivering in line with our business plan given all additional headwinds we had to face.
Consolidated sales volume grew by 6% on a year-on-year basis. Solid growth in Central Asia and Pakistan offset the softer volumes in Turkey and the Middle East. We are happy to see energy drinks gain in scale, a category where we still need to be more indexed and see a lot of growth potential. Despite cerain high base, once energy continued its positive momentum with more than 80% growth. The share of IC in the total mix was 24% and 1.8% lower than the last year. High growth in international operations where the share of IC is lower in the package mix, resulting in a negative geographical mix impacting for the consolidated IC share.
We delivered 80% organic growth in the first quarter, preliminarily driven by pricing actions across markets and revenue growth management initiatives. As a result of our focus and discipline to grow our business sustainably, we have achieved organic EBIT growth of 76% and limited the EBIT margin contraction to less than 30 basis points despite increased sales and marketing expenses and higher operating costs in the inflationary environment. Net income grew by 64%, reaching TRY 1 billion in our smallest quarter.
We keep increasing our investments in digital capabilities with our integrated digital supply chain planning platform, we continuously improve forecast security, decrease out of stock and increase efficiencies throughout our operations. In this respect, we reduced our auto stock by 300 basis points versus last year on a consolidated basis. In Turkey, online sales through CCI Next, our digital B2B platform increased by 20% from previous year. Building on the growth in comparable EPS last year and our solid liquidity position are generally and approved the Board's dividend distribution proposal.
We will pay INR 290 per share from May 22. Finally, on April 26, we completed the acquisition of Etap ?çecek, and now we own 80% of this juice concentrate business, which will open new possibilities for growing our business to create incremental value. Moving on to next slide, please. So talking about the consolidated volume, our core sparkling category grew by 10%, increasing to 82% in the total mix from 80% a year ago. Stills grew by 6%, having a flat share in the mix. In line with our value share value-based strategy, we continue to focus on smaller profitable tax, resulting in water volumes declined by 15%.
The Brand Coca-Cola grew by 14% in the first quarter of 23%, mainly on the strong double-digit growth recorded in Pakistan, Kazakhstan and Nusbicta. The double-digit performance of Ice Tea and energy drinks led the growth in the stills category. As I said, the masses Energy grew by more than 80%, while the total energy category grew by more than 40% on a year-on-year basis. Next slide, please. On Turkey, is Sage's solid base and impacted by the devastating earthquake.
As we all know, the sales volume of Turkey operations declined by 8% in the first quarter. Following some stocking at the year-end, ahead of the price increases generally while flattish as expected, February, however, was severely impacted by the devastating earthquake which happened in February 6. The earthquake region accounts roughly around 10% of our Turkey volume, while the highest impacted 3 cities account for about 2% of our business. The initial impact was quite severe.
The week of the earthquake and the following week, sales volume in the 3 cities was down almost 100%, and we had no business and nearly 7% in the rest of the 8 cities. Naturally, this disaster impacted the whole country's consumption pattern. We saw a double-digit decline in the rest of the country in these 2 weeks. In the following weeks, the operating environment started to recover gradually and we achieved modest growth in the month of March. The sparkling and steel categories declined by 9% in the first quarter within stills, energy drinks were the sound volume driver. The water category was down by 5% despite the strong growth of more profitable IC packs in line with our value generation focus.
State at the on-premise channel, which recorded its highest first quarter performance created a tailwind. As a result, the share of IC packages in the first quarter of 23 was realized at 35%, up by more than 300 basis points on a year ago for 2023. In the first quarter, we continue to navigate historical high levels of inflation that affected consumers' real disposable income. Nevertheless, we maintain our pricing discipline. As a result of our timely price adjustments, effective discount management and favorable mix, NSR per case grew by 109% year-on-year.
Lower volumes, higher energy prices and weaker Turkish lira created additional headwinds in Turkey. With the low cost base of the first quarter of the last year, the EBITDA margin was impacted negatively. We expect to see normalization in the second half of the year due to base effects. Let me move to international business on the next page, please. International operations volume grew by 15% with a solid performance in Pakistan and Central Asia, thanks to increased penetration and strong execution in the marketplace. The core sparkling category grew by 18% despite cycling and a strong base.
The Coca-Cola brand led this growth. The stills category grew by 31% despite cycling at 27% of growth last year, energy drinks volume increased threefold. Having a low base and cycling 31% growth a year ago, the water category contracted by 30% in the first quarter of the year. Supported by the solid volume momentum, pricing adjustments in line with inflation and improving channel mix, NSR grew by 73% year-on-year.
Price increases, scale efficiencies and disciplined cost controls resulted in 163 basis points EBITDA margin expansion in our international operations. Let me touch base on our 3 critical international markets. Our top 3 international markets reported double-digit growth in the first quarter. Pakistan grew by 14% despite a high base, ongoing macroeconomic challenges and increasing consumer inflation. The growth come from new outlet additions continued distributor warehouse capacity expansion and regional marketing focus.
Coca-Cola grew by 24% in Pakistan, the main driver of the sparkling category growth. Coke Studio, a successful initiative by the Coca-Cola Company future and Studio recorded music performances by the established and emerging artists continue to be highly acclaimed with the latest season seemed over 1 billion times, sparkling more than 60% growth a year ago, the steels category expanded further by 2%. The water category declined by 55%, while sparkling had 25% growth over last year. The year started with severe weather conditions in Uzbekistan, and this also caused energy shortages and even production delays for a certain period of time. Despite this, Uzbekistan continued its healthy growth, recording 21% volume growth in the first quarter.
This performance was supported by improved distributor structure, focused execution excellence and continue code investments to the market via being available and visible and being called. Sparkling grew 18%, while IC drove the growth of the stills by doubling in the volumes. Kazakhstan was the highest growing country in our international operations in the first quarter, registering 26% growth despite cycling 16% growth a year ago. The demand in the at-home channel was resilient, while the on-premise channel recorded a double-digit performance. Sparkling and Stills categories grew strongly, recording 36% and 24%, respectively. Now I will leave the floor to Andriy for our financial review. Andriy?
Thank you, Burak. While navigating a challenge in 2023, we concluded the first quarter with sound results in line with our business plan at the consolidated level. Net sales revenue increased by 80% in the first quarter. Excluding the favorable currency conversion impact, FX-neutral net sales revenue increase was also strong at 61%. This was primarily driven by solid volume performance of international operations, pricing actions across markets, proactive revenue growth management initiatives, improving channel mix and higher IC mix in Turkey. In the first quarter, we cycled a very low cost base in Turkey, thanks to successful sugar prebuys and hedging initiatives executed last year.
Since then, sugar prices more than tripled. Therefore, as we guided before, the first half of the year is more challenging compared to the second half due to this base effect. Moreover, the soft volume performance following devastating earthquake created additional headwinds. Therefore, we saw contraction in the gross profit margin in Turkey. This was more than offset by the higher gross profitability of international operations, which was due to strong volumes, successful hedging, disciplined cost controls and price adjustments early in the year.
On a consolidated basis, our gross margin expanded by 35 basis points. OpEx as a percentage of net sales revenue increased by 62 basis points due to weaker operating environment in Turkey and increase in sales and marketing expenses across the markets. Although overhead savings partly mitigated the impact. As a result, we generated an operating income of TRY 2.3 billion with an EBIT margin of 15.1%. We had high interest expenses incurred mainly from Turkish lira borrowings. Accordingly, net financial expenses were higher compared to the last year. Despite that, our net income grew by 64% to TRY 1 billion in this small quarter.
Next page, please. We closely watch the per unit case metrics as a key driver of real value generation. In the first quarter of 2023, consolidated net sales revenue per unit case increased by 51% on a FX-neutral basis. Despite being off peak levels, cost inflation continued to be high in our key markets. In this environment, we managed to contain COGS per unit case increase to 52% with volume momentum in international markets, having positive mix effect and marginally improving the economy of scale in these markets.
Successful hedging and prebuying of packaging materials, such as aluminum and resin, also made positive contribution to managing COGS per unit case in the quarter. Currency-neutral EBIT per unit case growth realized at 38%, thanks to disciplined OpEx management despite higher selling and marketing expenses in the first quarter. Next slide, please. In the first quarter, operating profit followed a healthy trend and was up by 76% compared to the same quarter last year. The main contribution to EBIT growth came from disciplined and timely pricing across all markets.
The robust volume growth of key international markets helped to offset the softer volume performance in Turkey and supported EBIT generation as well. Although IC mix was favorable in Turkey, the future consumption packages higher share in international markets neutralize the favorable package mix effect on a consolidated level. The higher commodity cost pressures, fueled mostly by sugar prices in Turkey and base effect of key raw material costs created a drag on the margins since we are cycling an extremely low base in the first quarter 2022.
However, we managed to navigate these challenges with strong operational performance, timely price initiatives and better channel mix. We also benefited from a favorable currency conversion. As a result, we reported $2.3 billion EBIT in first quarter 2023 with 15.1% margin. Let's move to the next slide, please. As a result of our tight financial policy, our balance sheet health is intact despite the challenging operational conditions. We have only $423 million of net debt, which is 0.7x of our EBITDA.
Our balance sheet is fit to support our growth agenda. Even considering the planned cash outflows related to the acquisition of net and Pakistan minority buyout, we expect net leverage to stay below 1x with positive free cash flow generation throughout the year. Our short effect position before net investment hedge is $400 million, which is only 0.6x of our 12 months rolling international EBITDA. We feel comfortable as long as that short position stays around 1x. The benchmark to international EBITDA is relevant since international operations are constant dividend pay to our Turkey legal entities that carries the majority of the debt.
If we also take into account the net investment hedge, our short FX position is only $51 million. Therefore, our P&L is quite resilient to the impact of TL devaluation throughout FX gains and losses. Thanks to the proactive debt management, the average maturity of our debt was 3.4 years. Close to 45% of our current debt is scheduled to be paid between 2026 and 2029. This creates an additional comfort zone to manage debt and liquidity in the globally tight liquidity conditions.
Prudent financial management, protection of healthy balance sheet and strong liquidity position will continue to be our priorities going forward. Let's move to the next slide. Finally, a brief overview of our commodity hedging initiatives for the current year and 2024. In the context of persistent cost inflation, we mitigate this pressure by dynamic RGM actions and also proactive timely bit physical and financial hedges, including prebuys and long-term procurement contracts. On the sugar, we cycled an extremely low base in Turkey operation in the first quarter. Its price more than tripled in the last 12 months in Turkey.
Although we don't expect an uptrend in prices as CVR as last year, we mostly completed our sugar procurement for 2023 while better visibility and planning purposes. On a consolidated basis, we have almost 90% price visibility for 2023. In markets where the sugar can be hedged, namely Iraq and Jordan, we also covered 75% for 2024 calendar year. On the aluminum, 2023 hedges give us 100% visibility, and we started looking beyond 2023 to lock in from favorable pricing levels for 2024. The aluminum hedge level for 2024 is around 15% at the moment.
On the revenue, our 2023 hedge coverage is around 65%. We are comfortable with this level for the moment as resin is closely related to oil prices globally, and we do not expect a major change there. We are also hedged around 10% for 2024 resin exposure. In total, the relatively flattish pricing trends of packaging materials in U.S. dollar terms year-on-year helped to cycle low base of sugar costs and to mitigate margin pressures to some extent in Turkey as well. Now back to Burak for his closing remarks.
Thank you, Andriy. CCs an emerging and frontier market bottler, and we operate in a volatile geography with tremendous growth potential. While we are keen on delivering successful results today and navigating challenges carefully, we are also focused on achieving our vision to be the best FMCG company across all of our markets. To achieve our vision and serve our purpose of creating value for all of our stakeholders by delivering sustainable long-term growth, we leverage our main growth pillars.
We always put our customers at the center of everything we do, execution capabilities are proven strength. We continuously invest in our commercial capabilities to support our customers and expand our digital reach. On the people side, we are proud and well organized and recognized the employers in 11 diverse countries in our region. Our values of passion, integrity, teamwork and accountable are shared throughout our organization.
We continuously try to improve ourselves to become an even better inclusive, diverse and inspired workplace. Our diverse brand portfolio includes some of the world's best known brands. We offer our consumers a wide range of products for every lifestyle and occasion. Sustainability is a fundamental and indispensable aspect of our business, and it is embedded in our vision and goals. We integrate sustainability principles into all of our operations and activities and are committed to achieving our 2030 sustainability pledge, which we announced last year. Our balance sheet is quite flexible with sufficient liquidity. We remain focused on driving profitable revenue growth and free cash flow generation while investing ahead of the curve to prepare to capture tomorrow's opportunities. I think now we can take your questions and leave the floor for Q&A. Thank you very much.
[Operator Instructions] We have a question from Charlie Higgs from Redburn.
I've got one on Pakistan, please. So I think the volume growth 13.6% is actually very solid. Can you just comment on what you're seeing in the market in Pakistan from the consumer and the customer standpoint? And did the volume growth benefit at all from the timing of Ramadan this year?
Pakistan volume growth, I think there is a lot of sort of pressure from different sites on the consumer and customer and the economy right now in Pakistan, right? And the currency level is difficult to sort of understand whether it's an artificial or real rate because there is a shortage of FX in the country. In these conditions, we see that as long as we are able to provide sustainability of our raw materials, there is a demand in the market. So the market will continue to grow. We really improved our RTM and our reach and profitability of entire value chain for customers and distributors and so on over the last few years. So we see that our products go to the end sale point through a fairly healthy and robust value chain despite of the current instability.
And consumer remains fairly strong. We believe that the further test later this year will be in terms of how much rupee will continue to devalue or not? And what kind of inflation will be there, what kind of further price increases we need to take. This may impact demand in the future, that the equation of volume and price nobody denies. But so far, the demand was fairly strong and the pricing levels we maintained. And as I said, the main issue for Pakistan remains sort of securing the sustainability of raw materials because some of them are imported rather than having a sort of front end on demand issues. But again, it may change as we go through the year as the price volume equation, we monitor very carefully to make sure that we continue to grow.
And then just a follow-up on the energy drinks opportunity. I mean where do you think it's the biggest across your markets? And is it more angled towards Predator and the more affordable range and expanding matters you're also seeing good growth at the more premium end with Monster.
We see energy drinks in one of our strategic categories for growth. Base is very small. Our presence is minimal still in the market. And we see it as a very long-term growth opportunity. And therefore, we see it as a multilayered portfolio. We experienced significant growth at the top end with the Monster brand, particularly in Turkey. And Predator is a more mass mainstream brand, and we are actively growing in -- we've started launches both in Turkey and some of the international markets, and this expansion proven to be successful. At this moment, I think one of the large markets where we are not present is Pakistan and this economic conditions need to solve itself. -- for us to decide for the launch or not. And second one, I think Uzbekistan has a very small footprint because we are focusing on the basics of the business and primarily sparkling and so on.
But as a long term, we see growth of energy drinks as a strategic category for us, along with sparkling beverages and iced tea and because of its economics and of its growth potential in terms of the consumption. And we see it as a multilayer portfolio. So we see continued growth on both premium side with Monster and as well as the Predator. We also maintain a small burn brand portfolio in Turkey, which proven to be quite resilient with very strong niche following and very good economics for the business.
We have another question from the line of Hanzade Kilickiran from JPMorgan.
Excuse me, actually, I was also going to ask about Pakistan and my question is answered, but maybe I can ask about make a follow-up on the margin side. You highlighted that the margin performance is softer than your expectations actually currently. And I do think that the current issue in Pakistan may also put some margin pressure and eventually impact your guidance.
I think we actually reiterated the guidance. And if we look forward, we see the second half of the year relatively easier than the first half of the year in terms of the margin performance. Many things may change, but that's our current view. Now to put it in perspective, Pakistan has a margin lower than our average. So overall, even some deterioration there would not have such a significant effect on the total portfolio as long as we continue to perform in Central Asia and Turkey. I hope this answers your question. But in short, we reiterated the guidance for the year.
And also on Uzbekistan, you have been building up some margins in after the product mix change. I mean is Uzbekistan diluting your margins or it starts supposed to affect your margin perform.
Uzbekistan is still marginally dilutive, yes. Not a significant difference of the average, but yes, it's lower than average. And I mean, taking into account the growth opportunity. Obviously, we are trying to improve, and we will continue to focus on the margin in all our markets. But with the growth opportunity there, we focused, first and foremost, on the growth, right? Uzbekistan grew 20%, 21% year-on-year in the first quarter. This is the quarter where they had a historical freeze. 1 week at least, there was no electricity or any other energy to run the facilities and so on. There was a stoppage. We still managed to grow 21%. So the growth opportunity essentially unlimited for the next few years. And we are really focused, first and foremost, to build capacity, reach more customers and consumers and all the secondary also focusing on maintaining and improving margins, but the growth is very critical in Uzbekistan. It's a huge opportunity.
[Operator Instructions] Ladies and gentlemen, there are no further questions. So your speakers, back to you.
Well, thank you very much. Thank you all for attending our call today, and thank you, your interest in our company. We know we're going through some challenging times and we've, I think, proved again once again that CCI is a very resilient and agile, an adaptive company into any kind of challenges that are ahead of us. We believe we're going to be able to deliver our commitments to the investors and those who believe in our company. So thanks a lot for joining our call today, and I hope to see you next time. Thank you very much. Bye-bye.
Ladies and gentlemen, this concludes today's conference call. Thank you all for your participation. You may now disconnect your lines.