CORPORATE PRESENTATION February 2018 1 DISCLAIMER This - - PowerPoint PPT Presentation

CORPORATE PRESENTATION

February 2018

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DISCLAIMER

This presentation contains forward-looking statements about Net Holding A.S. and their respective subsidiaries and

• businesses. These include, without limitation, those concerning the strategy of an integrated group, future growth

potential of markets and products, profitability in specific areas, the future product portfolio, development of and competition in economies and markets of the Group. These forward looking statements involve known and unknown risks, uncertainties and other factors, many of which are

• utside of Net Holding’s control, are difficult to predict and may cause actual results to differ significantly from any

future results expressed or implied in the forward-looking statements on this presentation. While Net Holding believes that the assumptions made and the expectations reflected on this presentation are reasonable, no assurance can be given that such assumptions or expectations will prove to have been correct and no guarantee of whatever nature is assumed in this respect. The uncertainties include, inter alia, the risk of a change in general economic conditions and government and regulatory actions. These known, unknown and uncertain factors are not exhaustive, and other factors, whether known, unknown or unpredictable, could cause the Group’s actual results or ratings to differ materially from those assumed hereinafter. Net Holding A.S. undertakes no obligation to update or revise the forward-looking statements on this presentation whether as a result of new information, future events or

• therwise.

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✓ Core Business Activities (Page 4 - Page 15) ✓ Financial Performance in 3Q 2017 (Page 16 - Page 21) ✓ Operational Performance (Page 22 - Page 26) ✓ Branding & Marketing (Page 27 - Page 31) ✓ Net Holding Financial Highlights (Page 32 - Page 35) ✓ Appendix (Page 36 - Page 38)

TABLE OF CONTENTS

NET HOLDING OPERATES UNDER ‘’MERIT’’ BRAND

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NET HOLDING AT A GLANCE

9 Casinos 8 Hotels 4,305 Beds Casino Floor: 35,000 m2 486 Live Tables 4,390 Slot Machines 11.7 mn m2 land in Turkey (Bodrum Land is off balance sheet) 2.5 mn m2 land in Northern Cyprus Properties Appraised at 615 mn USD except Bodrum Land 5

BUSINESS ACTIVITIES

1- Gaming

✓ Merit Casinos 35,000 m2 gaming space in 5 casinos in Northern Cyprus and 5 casinos in Eastern Europe. 40% of gaming market in N. Cyprus. Casino operator with 4,390 slot machines & 486 live game tables. (including Skopje & Svilengrad) Only company to operate as a casino chain in Northern Cyprus. ✓ Merit Poker Exclusive JV with Bwin, own brands Lebanese Poker Tour(LPT), Russian Poker Tour (RPT), Merit Mediterranean Poker Cup (MMC), Merit Poker Winter Fest, Merit Poker Fall Open, Merit World Cup of Poker, Merit Poker Summer Open, Merit Poker Spring Open, Merit Poker Festival.

2- Hotel Management

✓ Merit International Hotels & Resorts, only company to operate as a hotel chain in Northern Cyprus. ✓ We have mostly 5-Star Casino Hotels with 4,305 beds in Northern Cyprus, 36% of 5-Star bed capacity in Northern Cyprus.

Core Activities Non-Core Activities

3- Real Estate Portfolio (To be Sold)

✓ Net Holding has 11.7 mn m2 of land in Turkey, 2.5 mn m2 in Northern Cyprus & 0.3 mn m2 of land in Baku, Azerbaijan.

✓ All real estate will be revalued in 2017 with expectations of value increases especially for Northern Cyprus. ✓ Bodrum Land of 10 mn m2 not included in revaluation and does NOT show on B/S; appraised at 615 mn USD.

4- Lottery

✓ New privatization schedule will be determined by Sovereign Wealth Fund administration. We expect that, tender will have down payment base on management fee. ✓ We are following closely opportunities in our region. 6

MILESTONES: The PATH to GROWTH

From single casino on 2000 to 10 casinos on 2017

✓ 2006 Bodrum Milas Project Agreement ✓ 2007 Acquisition of Antalya Duty Free license with Nuance group ✓ 2008 Opening of Merit Lefkosa ✓ 2009 First Texas Holdem Poker Tournament ✓ 2013 Opening of Merit Royal Hotel & Casino ✓ 2013 Re-opening of Park under Merit brand ✓ 2013 Antalya Duty Free sold to Nuance for USD150 mn ✓ 2014 Bid and won Turkish National Lottery Tender together with JV partner SG. ✓ 2014 Opening of Merit Royal Premium Hotel ✓ 2016 entry to Montenegro with

• pening of casino in Podgorica

✓ 2016 Opening of Merit Casino Royal Splendid and Avala in Budva ✓ 2016 Opening of 2016 Market entry to Croatia with opening of Merit Casino Grand Lav in Split ✓ 2016 Opening of Merit Casino Libertas in Dubrovnik

Transformation Years (2000-2010) International Expansion (2010-2017)

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STRONG BACKGROUND & OPPORTUNITIES

✓ Uniquely Positioned to offer world class gaming experience within a maximum of 4-hours flight time from Russian speaking countries, Middle East, Europe, Africa and Scandinavian countries. ✓ Our dominant position in N. Cyprus enables us to pursue global growth opportunities in the neighborhood of our

• region. Merit opened 4 new casinos in Montenegro and Croatia and plans to add 3 more casinos in Eastern

Europe in 2018. In Bulgaria, Svilengrad Casino is under construction, the only 5-star hotel in the area. Svilengrad is just 2,5 hours driving distance from Istanbul and will start operations by 2018 2Q. In Macedonia, Skopje Casino is expected to be open in the end of 2018 FY. In Croatia, Zagreb Casino is expected to be open by year end 2018. ✓ Significant real estate base; Book value of all properties were appraised at 615 mn USD, except Bodrum Land. ✓ Exclusive Joint Venture Agreement with Scientific Games in 26 neighbouring countries to develop acquire and

• perate Lottery concessions.

✓ Net Holding founded in 1981 and listed on Borsa Istanbul (BIST) since 1989 with the ticker symbol “NTHOL”. The

• avg. daily trading volume of Net Holding was more than 2.0 mn USD in November 2017.

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NET HOLDING MASTER PLAN

Background & Status of the Company : The theme is “Transform and Improve Transparency” ✓ Net Holding was established in 1974 by a group of tourist guides. ✓ Listed in Istanbul Stock Exchange since 1989, first of ten initially listed entities in Turkey. ✓ The company is managed by Tibuk Family and several foreign institutional investors. The institutional investors represent 43% of the company. ✓ Complete transformation started in 2007 with current professional management with the aim of transforming the Company into a regional leading gaming operator. The Current Business Plan : Focus on Casino Operations ✓ The core of the business development plan by the current professional management stands as hotel and casino management with a strong potential interest in any form of licensed gaming and lottery in the “Regions of Interest”. ✓ The current business plan of the Company defines “Regions of Interest” as Turkey, Northern Cyprus, the Balkans, the Southeast Europe and high-demographic African and Arab countries that show clear appetite for licensed gaming and lottery. ✓ Only licensed physical and online casino management, lottery management and sports betting remain as allowed business segments of the Company by the same business plan with strict capex rules and restrictions in place.

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NET HOLDING MASTER PLAN

First Phase : Northern Cyprus, unmatched opportunity The first phase of the Company’s business plan was to expand into Northern Cyprus in hotel & casino management with strong emphasis on solid non-volatile EBITDA generation. First phase has been completed with Northern Cyprus expansion at its best generating a minimum base of USD 50mn even in adverse conditions as the ones experienced in 2016 with USD 60 mn expected in 2017 through organic sustainable growth. Adverse conditions experienced in 2016 were; ✓ Rapid devaluation of TL vs USD with NO effect on the Company’s EBITDA as revenue distribution stands at 77% hard currency. ✓ July 15th, 2017 failed coup attempt in Turkey leading to a massive drop in consumer confidence, consumer spending and restricted travel out of Turkey with NO effect on the Company’s EBITDA as Turkish visitors still made up 47% of visitors’ nationality. ✓ Shooting of Russian jet by Turkish Air Force, a first since 1954 for Russia leading to a massive drop in Russian arrivals to Turkey with NO effect on the Company’s EBITDA as visitors’ nationality stands at 53% foreign with a WELL DIVERSIFIED base that does not have a single nationality exposure. The Company’s business plan proved in 2016 that its strong vertebra of EBITDA generation in Northern Cyprus is NOT affected by economic downturn in Turkey, regional wars in Syria and Northern Iraq, a first time shut down Russian jet since 1954 by Turkey nor a massive devaluation of TL/USD.

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NET HOLDING MASTER PLAN

The Strength of Merit Brand in Northern Cyprus : Merit Conquers the Island…… The Company’s business plan’s first phase was a great success as Merit brand became the most preferred luxury hotel group and casinos in the island. The Company spent for each of its Northern Cyprus casino licenses a minimum of 100 mn USD as each license on the island is granted on the basis of building a brand new hotel that has to meet strict governmental requirements. Merit remains as the largest private sector company chain in Northern Cyprus. Merit remains as the island’s only hotel and casino chain. A new entrant to the casino market in Northern Cyprus would have difficulty in finding the adequate location and plot size for a hotel & casino construction and would have to invest close to USD 1bn and spend 5 years in construction to match the size of Merit operations on the island. For the next 5 years minimum, Merit remains unchallenged in the Northern Cyprus due to its current size, barriers of entry, harder qualifications for licensing and lack of sizeable plots on the seaside especially in Kyrenia where Merit Hotels occupy the best and most strategic spots. Merit Casinos offer a unique feature; Mega Jackpot through all of its slots being connected in all its casinos to form the largest ever slot jackpot pool of the island. Merit Casinos use its own internally developed “WISE” casino live game management program completely custom tailored to the region’s casino dynamics that incorporates as well unique internally developed player rating and player card system. Merit Poker has been part of the Company’s growth plan with a focus on tournaments with largest prize pools and cash games that allow cross-marketing through the casinos’

• ther games.

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NET HOLDING MASTER PLAN

Second Phase : Expand into The Balkans, making inroads through friendlier means The second phase of the Company’s business plan was to expand into the Balkans in hotel & casino management with clear aim to repeat the Northern Cyprus success in newly discovered jewels of the Balkans & The Adriatic regions. The main difference of second phase and first phase stands out as the strategic approach difference for the Balkans from capex perspectives. Northern Cyprus required large capex as per licensing requirements whereas for the Balkans a very low capex structure was initiated. The Balkan strategy is as follows; ✓ Define the country and the city to inaugurate casinos based on local demographics, ease of access for air travel, ease

• f visa granting or no visa status and relatively short air travel distance to the Company’s existing player base,

✓ Understand licensing requirements & apply for licensing, ✓ Choose a five-star hotel that best fits the standards of Merit brand and rent a casino space from the hotel owner for 5 +5=10 years total, second five year phase conditional on the Company’s one-way approval and an exit right at any moment by the Company with 6 month rent penalty, ✓ Import your slot machines, your live game tables, your CCTV camera systems, bring a skeleton crew of Expats, use maximum local staff and start operations, The Company’s Balkans expansion plan has been defined as very flexible and low capex operation allowing through company’s European licenses to assess rapidly whether a casino is generating any positive EBITDA at all and if not shutting down that casino to move to the next target point. This second phase of the Company’s business plan also aimed to increase the frequency of Merit players’ visits to Merit casinos by adding new venues to the existing Northern Cyprus portfolio.

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NET HOLDING MASTER PLAN

Golden Rules for the Balkans : Never, Never, Never………. The Capex for each casino for the Balkans’ expansion has a limit of USD 5mn , further spending is subject to both board and key shareholders’ approval. If any casino in the Balkans has a two-year losing streak that casino is shut down and the equipment transferred to a new targeted casino operation. Spirit of Merit in the Balkans : Get Ready for more and more and more……. The Second phase of the Company’s business plan for the Balkans includes first time features for the Balkans never

• ffered before and unique to Merit Brand as captured by “Spirit of Merit”;

✓ Each player is subject to a unique Merit player rating system based on game type played, average bet per hand, total time spent at games which allows Merit Casinos to rank the player with qualifying players being given complimentary rooms, air travel, dinner at a la carte restaurants, spa use and redeemable points that can be used as cash within Merit Casinos, ✓ Merit Casinos offer the highest limits for both live games and slot machines in Europe, ✓ Merit Casinos offer unique Merit Mega Jackpot for slots for each country by far 15 to 20 times higher than European casinos, ✓ Free open buffet food and drinks at Merit Casinos, unique feature in Europe where players are charged even for coffee, ✓ Epic new Merit Casinos’ venues that are interlaced with Game of Thrones, Star Wars, Indiana Jones and James Bond, ✓ Exclusive Merit Poker tournaments now for the first time in the Balkans, ✓ Player satisfaction centered approach to gaming by Merit,

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NET HOLDING MASTER PLAN

Further expansion points in the Balkans : EBITDA quest continues……. The Company’s business plan incorporates for 2018 the inauguration of three casinos namely; ✓ Merit Svilengrad at Bulgaria at a strategic crossroads of Turkey, Greece and Bulgaria, only 2 hour by car from Istanbul, a year-around destination for Greek, Bulgarian and Turkish players. ✓ Merit Skopje in Macedonia at the home of Alexander the Great to capitalize on 500,000 inhabitants city and adding a location that is 12-month around EBITDA generator. ✓ Merit Zagreb in Croatia to capitalize on 700,000 inhabitants city and adding a location that is all year around EBITDA generator. The Company’s business plan underlines a strong interest for further expansion into the following countries without any specific timeline nor commitments; ✓ Ljubljana in Slovenia, ✓ Belgrade Serbia, ✓ Sarajevo, Bosnia & Herzegovina, ✓ Tirana, Albania, ✓ Odessa, Ukraine, ✓ Kiev, Ukraine, The Company reviews annually the political and economical status of the countries for which it has stated an interest to open a casino. The Company’s expansion plan into the Eastern Europe targets physical licensed casinos with an interest to explore licensed sports betting and lottery in upcoming years.

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CORPORATE ACTION & SHAREHOLDER STRUCTURE

✓ Restructuring of entire Net Group into regional gaming operator focused on casinos, sports betting and lottery management. ✓ Merger transaction was finalised on October 19th, 2017. ✓ Eliminating cross holdings. This simplification will strengthen minority rights and corporate simplification. 15 Shareholders Ratio Shares Tibuk Family 29.67% 167,312,204 Net Group (Treasury Shares) 28.02% 157,998,349 Foreign Institutional Investors 5.71% 32,169,055 Free Float 36.60% 206,396,329 Total 100.00% 563,875,937

Tibuk Family 29.67% Net Group (Treasury Shares) 28.02% Pine River FI Master Fund 5.71% Free Float 36.60%

3Q17 EARNING REVIEWS

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Net Holding announces its 3Q/2017 results; stellar operational performance leads to historic record-high consolidated EBITDA for the 9M. ✓ Net Holding’s consolidated EBITDA for 9M/17 rose to 114 mn TL (32.1mn USD) from 66.0mn TL (22.1 mn USD) up 73% in TL and up 45.2% in USD terms. ✓ The strong growth of EBITDA for 9M/17 was driven by robust sales increase for 2017, up from 305 mn TL (101.6mn USD) last year same period to 428 mn TL (120.5mn USD) this year. ✓ The sales momentum corresponds to 40.3% and 18.1% yoy increases respectively in TL and USD terms for 9M/17. ✓ The Cash position of the Company has slightly decreased from 380 mn TL (126mn USD) in 9M/16 to 375mn TL (105.6mn USD) in 9M/17. The Debt position of the Company has slightly increased to 566.8mn TL (159.4mn USD) in 9M/17 versus 455mn TL (151.6mn USD) in 9M/16. ✓ The Net Debt position of the Company stands at 191mn TL (54mn USD) in 9M/17 versus 75mn TL (25mn USD) in 9M/16.

3Q17 EARNING REVIEWS

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Regional Split of 9M/17 for EBITDA; ✓ Northern Cyprus up from 86mn TL (28.6mn USD) in 9M/16 to 137.2mn TL (38.6mn USD) in 9M/17. ✓ Montenegro up from 1.4mn TL (0.466mn USD) in 9M/16 to 16mn TL (4.5mn USD) in 9M/17. ✓ Croatia registered 11mn TL (-3,1mn USD) losses in 9M/17 on its debut of operations and was not open for business in 2016. Headquarters expenses were 16.8mn TL (-5.6mn USD) in 9M/16 versus 21.6mn TL (-6.1mn USD) in 9M/17. Difference between consolidated EBITDA at Net Holding level and above is from elimination and minor subsidiaries. (Net Yayın, Inter Limo, Enet, etc) Please bear in mind up until a new casino is fully functioning all related opening costs and capex remain at Net Holding, contributing to headquarters expenses. In the case of 9M/17, Svilengrad Casino’s (Bulgaria) initial operating costs were included in headquarter expenses whereas last year’s headquarters expenses included Split and Dubrovnik casinos capex.

3Q17 EARNING REVIEWS

Operational Status in Hotels & Casinos; ✓ Overall, from an operational perspective, Northern Cyprus Merit Hotels & Casinos continue to perform strongly with substantially important organic growth that places Northern Cyprus’ EBITDA at up 59.5% in TL terms and 34.9% in USD terms. ✓ The average occupancy rate of Merit Hotels in Northern Cyprus has gone up to 76% in 9M/17 from 69% in 9M/16 while RevPAR has gone up to 332USD in 9M/17 versus 310USD in 9M/16 (yoy increase of 7.1% in USD terms). ✓ The total number of visitors to Merit Casinos in Northern Cyprus surged to 1,289,097 unique visitors in 9M/17 versus 1,064,680 unique visitors in 9M/16, up 21% in 9M/17. ✓ Montenegro Casino operations continue into their second year with much better performance contributing positively to the Group’s growth. ✓ Croatia Casinos have started their operations in mid-December 2016 with 2017 being their first year of

• peration. Croatian casinos are expected to return to positive territory in their second year of operations in 2018 as it

is typically of any casino. ✓ Merger Status & Impact on Financials ✓ The merger of Net Turizm into Net Holding has been completed successfully as of October 10th, 2017. ✓ However; as the merger’s completion was past 9M/17 deadline of September 30th, 2017, 9M/17 results are still in the “old” format with relevant minority rights and cross holding in place. ✓ The 4Q/17 results of Net Holding will be post-merger without any cross-holding nor minority rights, simplified and unencumbered of any problems from the past “old” format. ✓ Net Holding’s pre-merger paid-in capital was 338mn TL and will stand at 563mn TL post-merger.

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3Q17 EARNING REVIEWS

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18.4% 43.8% 5.1%

• 16.7%

115.2% 101.7 120.3 80.0 90.0 100.0 110.0 120.0 130.0 9M/16 9M/17

Sales (mn USD)

22.3 32.0 20.0 23.0 26.0 29.0 32.0 35.0 9M/16 9M/17

Ebitda (mn USD)

151.5 159.3 100.0 120.0 140.0 160.0 180.0 200.0 9M/16 9M/17

Total Financial Debt (mn USD)

126.5 105.4 80.0 100.0 120.0 140.0 9M/16 9M/17

Total Cash and FI (mn USD)

25.0 53.9 0.0 20.0 40.0 60.0 9M/16 9M/17

Net Debt (mn USD)

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EBITDA Breakdown 3Q 2017 Segments 9M 2017 9M 2016 Northern Cyprus 137.2 86.8 Montenegro 15.9 1.5 Croatia

• 11.0
• 0.2

Other+ Eliminations

• 28.0
• 22.1

Total 114.1 66.0 mn TL 9M 2017 9M 2016 2016 2015 2014 Net Sales 428.2 305.6 472.0 403.1 308.4 EBITDA 114.1 66.0 143.8 83.9 86.1 Adjustments Cancellation of bid bond 0.0 0.0 0.0 26.4 0.0 Income from associates 0.0 0.0 0.0 4.5 0.2 Adjusted EBITDA 114.1 66.0 143.8 114.8 86.3 Margin (%) 27% 22% 30% 28% 28%

3Q17 EARNING REVIEWS

CASINO PERFORMANCE: EBITDA & SALES

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32 45 51 52 70

10 20 30 40 50 60 70 80

2013 2014 2015 2016 2017 E EBITDA IMPROVEMENT (mn USD) 90 132 138 134 179

20 40 60 80 100 120 140 160 180 200

2013 2014 2015 2016 2017 E SALES IMPROVEMENT (mn USD)

CAPITAL EXPENDITURES GUIDANCE

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5 5 5 5 5 5 3 3 23 23 12 3 3 7 7 5 5 5 5 5 5 3 3 3 3 3 3 5 10 15 20 25 30 35 40

2014 2015 2016 2017 2018 2019

Maintenance Eastern Europe Merit Royal MC* MCC expansion Others

* Maintenance CAPEX. ** These capital expenditures are only in casinos for maintenance purposes.

A GLANCE at NET HOLDING’S PROPERTIES

* All properties has been valued as Book Value reported and appraised in 29.09.2017 CBT USD selling rate. ** According to CMB rules and regulations, all listed companies have to make real estate valuation in every two years. The valuation is done by CMB approved appraisal companies. *** Does not include Bodrum Land.

23 Categories Net Book Value TL Net Book Value USD Turkey Land 68,716,463 19,310,514 Cyprus Land 308,822,762 86,784,533 Turkey Real Estate 117,608,868 33,050,124 Cyprus Real Estate 1,367,495,090 384,289,754 Azerbaijan Land + Real Estate 171,859,124 48,295,384 Total 2,034,502,307 615,212,709

OPERATIONAL STATISTICS

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Revenue Distribution By Currency (2017) Visitors Nationality (2017) Local Currency vs. Hard Currency (2017)

CASINO REVENUE GENERATION

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Total Revenue by Segments (2017) Casino Revenue by Segments (2017)

Slots 24% Live Games 76%

19% 28% 81% 65% 45% 81% 72% 19% 35% 55% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Merit Royal Merit Park Merit Lefkosa Merit Cyprus Garden Merit Crystal Cove Slots Live Games

CASINO REVENUE DISTRIBUTION

61% 43% 51% 40% 50% 22% 44% 27% 52% 38% 7%

10% 13% 22% 8% 12%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Merit Royal Merit Park Merit Lefkosa Merit Cyprus Garden Merit Crystal Cove Roulette Blackjack Baccarat Poker

Roulette 53% Blackjack 16% Poker 27% Baccarat 4%

Total Live Games Breakdown Live Games Breakdown by Casinos

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MERIT BRANDS COMBINES WITH TECHNOLOGY

Merit Casinos use the following top-notch Professional equipment at its premises; ✓ Cammegh (UK) Roulette Wheels ✓ Matsui (Japan) Chips ✓ Dal Negro (Italy) playing cards and Abbiati green cloths ✓ PATIR (Germany) & GASSER (USA) casino chairs ✓ Shufflemaster/Bally (USA) card shufflers & chipper machines ✓ Bally (USA), WMS (USA), Novomatic (Czech Republic), Konami (USA), Interblock (Slovenia), EGT (Bulgaria), Spielo (USA) 3D &multi player gaming and slot machines equipped with TITO plus Player Tracking System. ✓ Merit Casinos also produce its own live game tables since 2008.

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MEGA JACKPOT

✓ Merit Casinos offer to its slot machine players a unique experience by its Mega Progressive Jackpot system, linking with Wide Area Progressive all of its 4,000 slot machines at its 10 casinos. ✓ In the 29-casino Northern Cyprus gaming market, Merit is the only casino to offer a 0.5 mn USD plus Mega Progressive Jackpot plus sub-tier additional jackpots at its casinos thus creating a clear uncontested competitive edge on the island & in the region. ✓ Since the inception of the Mega Progressive Jackpot in 2012, Merit has paid out a total of over 13 mn USD in various jackpots to their qualified slot machine players on top and above of regular slot machine winnings.

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PLAYER CLUB CARD

✓ Merit Casinos has an active base of more than 700,000 members registered to their Player Loyalty Program & Tracking System at four different levels; Sapphire, Silver, Gold and Platinum. ✓ Valued members of Merit Casinos’ Player Loyalty program have enjoyed the distribution of over 30 mn USD of promotional tickets during 2012-2017 period, on top and above of all regular winnings from slot machines. These promotional tickets are not redeemable as cash but only used for playing at slot machines.

200 400 600 800 1,000 1,200 2012 2013 2014 2015 2016 2017 2018 2019 56 128 274 396 578 714 900 1,100

Player Club Card (1,000 people)

Net Holding Expectation

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✓ Leading Texas Hold’em Poker Tournament Operator «Merit Poker» has exclusive JV with Bwin while developing its own brands; Lebanese Poker Tour (LPT), Russian Poker Tour (RPT) and Mediterranean Poker Cup (MPC). ✓ Merit Poker has been founded by Merit Casinos in 2008 and specializes in Texas Hold’em Tournaments & cash games. ✓ During 2008-2015 period, Merit Poker has successfully organized 57 international tournaments and 841 satellite tournaments in Northern Cyprus with 35,074 players from 87 different countries actively listed. ✓ Merit Poker has distributed a total of 50 mn USD in total tournament prizes to players. ✓ Merit Poker owns & operates the following Texas Hold’em Tournament brands; Merit Mediterranean Cup (MMC), Lebanese Poker Tour (LPT), Russian Poker Tour (RPT), Merit Poker Winter Fest, Merit Poker Fall Open, Merit World Cup of Poker, Merit Poker Summer Open, Merit Poker Spring Open, Merit Poker Festival.

A NEW BRAND in GAMING: MERIT POKER

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NEWEST TOURNAMENTS: ROULETTE & BACKGAMMON

✓ Tournaments which have organized in the Merit Casinos attracted more attention than expected, as a result, turned into an activity that all guests eagerly track its annual timetable eagerly. ✓ For the first time, the Merit Open International Backgammon Tournament was held in 2013. Being grew with an increasing interest year over year, with 500 people from 40 countries it became the biggest international modern backgammon tournament in the world in 2016. This large organization, which is a partnership of Worldwide Backgammon Federation and Casino Merit Park, has won a prestigious place in the world backgammon society. The hotel reservations become filled 6 months in advance as the tournament is taking place in the first week of November. ✓ Roulette tournaments for the first time launched in 2014 with the ‘’Roulette Park’’

• brand. It have won the favor of all casino guests, as well. The roulette

tournaments which are held every year in January, February and March with high award ceremonies try combine the enthusiasm of the competition with

• entertainment. Casino Merit Park's tournaments are continuing with new ideas

added.

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BALANCE SHEET / ASSETS

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mn TL 9M 2017 9M 2016 2016 FY 2015 FY 2014 FY ASSETS CURRENT ASSETS Cash and Cash Equivalents 285.7 301.8 321.6 421.8 586.1 Financial Investments 89.3 78.4 157.8 61.4 44.9 Trade Receivables 206.0 139.1 156.4 131.5 90.9 Receivables From Finance Sector 4.9 39.9 58.3 0.1 0.0 Other Receivables 5.0 17.7 13.6 18.2 17.3 Inventories 32.2 25.7 28.7 21.7 18.2 Prepaid Expenses 18.4 13.2 13.5 8.5 9.3 Assets Relevant to Current Period Taxes 4.0 5.7 6.6 11.2 4.0 Other Current Assets 23.3 22.8 23.8 21.5 19.9 TOTAL CURRENT ASSETS 668.7 644.5 780.4 695.9 790.6 NON-CURRENT ASSETS Financial Investments 3.2 2.8 3.2 0.8 0.8 Other Receivables 4.9 4.4 4.6 4.1 3.7 Investments Evaluated by Equity Pickup Method 81.9 68.1 77.2 66.9 57.0 Investment Properties 532.8 405.5 519.5 407.3 230.7 Tangible Fixed Assets 1,693.6 1,659.0 1,648.1 1,580.5 1,008.6 Deferred Tax Assets 18.6 46.7 21.1 39.5 37.4 Other Non-Current Assets 28.9 49.8 22.7 38.0 47.6 TOTAL NON-CURRENT ASSETS 2,363.9 2,236.3 2,296.3 2,136.9 1,385.8 TOTAL ASSETS 3,032.6 2,880.8 3,076.6 2,832.8 2,176.4

BALANCE SHEET / LIABILITIES

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mn TL 9M 2017 9M 2016 2016 FY 2015 FY 2014 FY LIABILITIES CURRENT LIABILITIES Financial Borrowings 10.7 4.5 4.5 4.9 90.9 Current Installment of Long Term Financial Borrowings 110.8 345.2 168.8 247.9 244.6 Trade Payables 86.3 66.6 55.9 45.4 40.2 Payables From Finance Sector 4.3 23.8 35.4 0.6 0.0 Current Tax Liabilities 1.5 4.1 4.8 7.9 4.1 Current Provisions 2.9 2.8 2.7 2.2 1.8 Other Current Liabilities 36.2 27.1 35.3 19.0 16.7 TOTAL CURRENT LIABILITIES 252.7 474.0 307.3 327.9 398.2 NON-CURRENT LIABILITIES Financial Borrowings 445.4 105.9 384.8 202.3 390.0 Trade Payables 0.7 1.3 2.0 2.5 2.0 Deferred Tax Liabilities 259.1 255.8 268.0 258.3 111.1 Other Current Liabilities 3.3 2.8 4.4 2.4 1.9 TOTAL NON-CURRENT LIABILITIES 708.5 365.8 659.2 465.5 505.1 TOTAL CURRENT AND NON-CURRENT LIABILITIES 961.2 839.8 966.5 793.4 903.3 SHAREHOLDERS' EQUITY Parent Company's Equity 2,051.4 1,542.4 1,187.3 1,639.9 1,069.9 Paid In Capital 563.9 365.8 365.8 365.8 365.8 Inflationary Adjustments of Shareholder's Equity 146.1 56.8 56.8 56.8 56.8 Treasury Shares

• 237.5
• 92.1
• 158.8
• 70.5
• 125.7

Revaluation of Tangible Fixed Assets 803.1 682.7 535.1 711.9 337.7 Other Equities 774.3 542.9 412.7 509.9 412.5 Net Profit / (Loss) for the Period 1.5

• 13.6
• 24.2

66.1 22.8 Minority Interests 20.0 498.6 922.8 399.5 203.2 TOTAL SHAREHOLDERS' EQUITY 2,071.4 2,041.0 2,110.1 2,039.4 1,273.1 TOTAL LIABILITIES 3,032.7 2,880.8 3,076.6 2,832.8 2,176.4

INCOME STATEMENT

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mn TL 9M 2017 9M 2016 2016 FY 2015 FY 2014 FY Net Sales 428.2 305.6 472.0 403.1 308.4 Cost of Sales

• 295.3
• 214.7
• 292.0
• 246.4
• 189.4

Gross Profit From Trade Activity 0.0 0.0 180.0 156.8 119.0 Gross Profit From Finance Sector (Ekspres Invest) 0.0 0.0 5.6 0.0 0.0 GROSS PROFIT 132.9 90.8 185.6 156.8 119.0 General Administrative Expenses

• 82.9
• 69.0
• 102.3
• 86.7
• 68.7

Marketing Expenses

• 16.4
• 15.5
• 25.8
• 19.4
• 12.6

Net Other Operating Income / (Expenses) 15.6 3.9 11.1

• 20.1

12.1 Income from unconsolidated affiliates 0.0 0.0 0.0 0.0

• 0.2

OPERATING PROFIT/ (LOSS) 49.2 10.2 68.5 30.5 49.6 Income (Expenses) from Investment Activities 2.4 3.5 4.2 135.3 8.3 Investments Evaluated by Equity Pick-Up Method 1.2

• 0.2
• 1.8
• 4.5

0.0 OPERATING PROFIT BEFORE FINANCIAL INCOME (EXPENSE) 52.9 13.5 70.9 161.3 57.9 Financial Income 28.3 32.3 55.9 85.7 21.3 Financial Expenses

• 86.7
• 56.9
• 98.2
• 122.5
• 71.1

OPERATING INCOME PROFIT BEFORE TAXATION

• 5.5
• 11.2

28.5 124.6 8.1 Tax Income / (Expense) 4.2 5.6

• 32.8
• 27.2

15.2 OPERATING ACTIVITY PROFIT / (LOSS) FOR THE PERIOD

• 1.3
• 5.6
• 4.3

97.4 23.3 Profit (Loss) from discontinued operations

• 1.0
• 0.8

0.0 0.0 0.0 PROFIT / (LOSS) FOR THE PERIOD

• 2.3
• 6.4
• 4.3

97.4 23.3 Minority Interests

• 3.8

7.2 19.9 31.3 0.5 Parent Company's Share 1.5

• 13.6
• 24.2

66.1 22.8 EBITDA 137.2 86.8 143.8 83.9 86.1

CASH FLOW

35

mn TL 9M 2017 9M 2016 2016 FY 2015 FY 2014 FY Net Profit / (Loss) For the Period

• 2.3
• 6.4
• 4.3

97.4 23.3 Adjustments for Depreciation and Amortisation Expenses 52.4 45.8 61.2 46.7 36.5 Adjustments for Interest Expense 25.9 26.3 34.6 34.4 44.4 Adjustment for Losses (Gains) of Revaluation of Investment Properties

• 127.5
• Others

19.3

• 17.8

28.4 21.1

• 18.6

Net Cash Flow from operating activities before changes in operating assets and liabilities 95.3 47.8 119.9 72.1 85.6 Change in Working Capital

• 14.4
• 31.1
• 110.8
• 48.1
• 132.3

Cash Flow From Operating Activities 80.9 16.7 9.1 24.0

• 46.8

Capex

• 25.5
• 125.3
• 239.9
• 103.5
• 111.8

Free Cash Flow 55.5

• 108.6
• 230.8
• 79.5
• 158.5

CASH FLOW FROM FINANCING ACTIVITIES

• 101.4
• 13.7

113.5

• 98.9

600.5 Cash Inflows From Sale of Shares in Subsidiaries 117.1 26.7 143.5 214.6 376.8 Cash Outflow Due to Purchase of Own Shares

• 170.9
• 21.3
• 88.3
• Adjustments for sale or changes in share of associates and joint ventures
• 0.4
• Cash Inflow From Proceeds of Financial Borrowing

122.1 44.3 231.1 31.1 362.0 Dividends paid

• Cash Outflow From Repayment of Financial Borrowings
• 143.8
• 37.2
• 138.6
• 310.2
• 93.8

Interest Expense

• 37.9
• 47.8
• 60.2
• 85.9
• 55.6

Interest Income 12.0 21.5 25.6 51.5 11.2 NET INCREASE/ (DECREASE) IN CASH BEFORE EFFECT OF EXCHANGE RATE CHANGES

• 45.9
• 122.3
• 117.3
• 178.4

442.0 EFFECT OF EXCHANGE RATES ON CASH AND CASH EQUIVALENT 10.0 2.3 17.1 14.1 4.6 NET INCREASE/DECREASE OF CASH

• 35.9
• 119.8
• 100.2
• 164.3

446.6

BODRUM LAND

300 mn USD of monetization opportunity – NOT even on balance sheet.

1,000 hectares (10 mn of land running along just behind the town of Gulluk on the Mediterranean coast; 5 minutes drive from Bodrum International Airport, 30 minutes from the town of Bodrum. Topography lends itself well to villas as it will allow each property to feel relatively secluded with uninterrupted views. The Project includes an iconic grand resort hotel, spa retreats up on the hills, world class conference facilities, golf club at International PGA standarts, polo club mainly geared to affluent international tourists. Current zonning plan is “Tourism” with 30% buildable-to-land area ratio, allowing 3 mn m2 of buildable space. Savills, has produced a report in 2011 with 16% buildable to land area ratio (max. allowed in 2011), accordingly; Stage 1: 3, 304 residential keys and 141 hotel rooms for the golf hotel, 382 for the grand resort hotel and 132 rooms for the spa

• hotel. Stage 2: Adding 545 hotel rooms and another 3,304 residential keys. The property is under a revenue sharing

agreement with a local developer since 2007 that entitles NTHOL to 19% of the revenues of the Project, with a deadline to finish construction until June 2013, which has elapsed. Due to the type of the contract, the title of the property has been passed to developer & the asset (plus attached revenue sharing deal) can not yet be seen in NTHOL accounts. Three routes of monetization remain available per established judiciary practice & agreement between parties; i. Developer exercises his call option & buys out Net Holding’s shares in this project at 300 mn USD ii. Developer sells to 3rd party with Net Holding’s consent, 60% of proceeds goes to Net Group. iii. Developer defaults on contract, Net Holding gets back the land to its B/S at new market value without any compensation to developer.

36

FITCH RATES NET HOLDING A.S. ‘B’; OUTLOOK STABLE

37

✓Fitch Ratings has assigned Turkish gaming group Net Holding A.S a Long-Term Issuer Default Rating (IDR) of ‘B’ with Stable Outlook. ✓The IDR of ‘B’ reflects Net Holding' sustainable business model, which has shown resilience over the past years despite sharp depreciation of the Turkish lira (TRY), and deleveraging capacity by 2020 after a planned sizeable investment phase, with adequate financial flexibility. ✓The Stable Outlook reflects our expectation that Net Holding’s resilience should continue over the next few years, as the company plans to improve geographic diversification into new regions through a different asset- light operating model, helping to broaden its scale through successful strategy execution, when the planned investment starts generating additional revenues.

JCR CREDIT RATING

38

*Assigned by Japan Credit Rating Agency, JCR on October 19, 2017

✓ Integrated business model combining casino and hotel management with leading market share in the TRNC under the Merit brand, ✓ Regulatory approval for the Net Holding and Net Turizm merger in FY2017 with anticipated positive effects on efficiency, transparency and sustainability, ✓ Significant share of foreign currency revenues and diverse international customer base supported by marketing activities/loyalty programs, ✓ Favorable levels of financial leverage and long term dominated resource structure contributing to liquidity management, ✓ Regional expansion strategy offering EBITDA diversification and decreasing geographical concentration risk on the TRNC, ✓ Large share of tangible assets/real estate portfolio and collaboration with internationally renowned players,

✓ Japan Credit Rating Agency assigned «A» rating in 2017 and upgraded outlook from stable to positive. ✓ Net Holding successfully issued 650 mn TL Corporate Bond between 2013-2017. ✓ NTHOL Corporate Bonds are one of the most liquid non- banking corporate bonds.

Strengths