Q4 & 2014 RESULTS February 13, 2015 NOTICE This presentation - - PowerPoint PPT Presentation

Q4 & 2014 RESULTS

February 13, 2015

2

This presentation may contain statements that are forward looking. These statements are based on current expectations and assumptions that are subject to risks and uncertainties, which may cause actual results to differ materially due to factors discussed in this presentation, in our press release, in the Risk Factors section of Turkcell’s most recent Form 20-F, or in other reports and filings with the US Securities and Exchange Commission. We undertake no duty to update or revise any forward looking statements, whether as a result

• f new information, future events or otherwise.

Please note that all financial data is consolidated, whereas non-financial data is unconsolidated unless otherwise specified.

NOTICE

BUSINESS OVERVIEW

İlker Kuruöz Turkcell CEO

4

TRY MILLION1

Q4 2014

Growth YoY %

Revenue 3,103

8%

EBITDA2 917

8% EBITDA Margin

29.6%

0.1pp

EBIT 466

26%

Net Income 258

(49%)

TURKCELL GROUP: FINANCIAL HIGHLIGHTS

1 TRY figures are based on IFRS TRY figures 2 EBITDA is a non-GAAP financial measure. Please refer to the press release for the reconciliation of EBITDA to net cash from

• perating activities.

FY 2014

Growth YoY %

12,044

6%

3,762

6%

31.2%

0.1pp

2,122

9%

1,865

(20%)

Highlights

• Solid performance both in Q414 & FY 2014, guidance delivered
• Net income adversely impacted by macroeconomic conditions in international markets

QUARTER YEAR

5

FY 2014 TRY MILLION1 Revenue

9,369

3%

1,253

35%

758

(12%) EBITDA

2,924

3%

327

38%

232

(12%)

EBITDA Margin 31.2% 0.2pp 26.1% 0.4pp 30.6% 0.1pp

EBIT

1,865

1%

88

64%

45

7% % of Group Revenues

78% 10% 6%

TURKCELL GROUP: OVERVIEW OF MAJOR BUSINESS LINES

1 TRY figures are based on IFRS TRY figures and standalone figures, does not include consolidation eliminations

TURKCELL TURKEY

YoY %

ASTELIT

YoY %

TURKCELL SUPERONLINE

YoY %

6

TRY MILLION

TURKCELL GROUP 3,103 8% 12,044 6%

TURKCELL TURKEY VOICE1

1,555 1% 6,374 (1%)

MOBILE BROADBAND

567 44% 1,931 34%

MESSAGING

151 (26%) 645 (23%)

MOBILE SERVICES

123 21% 430 5%

FIBER BROADBAND

336 28% 1,253 35%

OTHER SUBSIDIARIES2

376 (2%) 1,422 5%

TURKCELL GROUP: REVENUE BREAKDOWN OF SEGMENTS

1 Voice revenues include outgoing, incoming, roaming and other (comprising almost 1% of Turkcell Turkey) revenues 2 Includes consolidation eliminations

FY 2014

YoY %

Q4 2014

YoY %

7

15.2 19.4

Postpaid (mn) Prepaid (mn)

TURKCELL TURKEY: OPERATIONAL HIGHLIGHTS

Total subs 34.6 mn

11.7 13.2 14.0 15.2 62% 65% 67% 70%

FY11 FY12 FY13 FY14

Postpaid subscriber Share of postpaid in revenues

POSTPAID TREND & ARPU Postpaid subscriber

↑1.2 mn

in FY14 SUBSCRIBER

ARPU (TRY)

Q4 2014

Growth YoY %

FY 2014

Growth YoY %

Blended

23.0

8.0%

22.5

3.7% Postpaid 38.0 4.1% 37.7 1.1% Prepaid 11.6 2.7% 11.6 (1.7%)

Total

↑1.2mn

Q414 FY14

↓548K

Postpaid

↓98K ↑401K

Net add

SUBSCRIBER (MILLION)

8

724 1,040 1,437 1,931 846 865 838 645 389 389 408 430 24% 26% 29% 32%

FY11 FY12 FY13 FY14

3.8 6.2 9.6 12.7 12% 19% 30% 40%

FY11 FY12 FY13 FY14

Smartphone (million) Penetration

TURKCELL TURKEY: STRONG GROWTH IN DATA

SMARTPHONE TREND MOBILE BB & SERVICES REVENUE ↑5% ↓23% ↑34% 791K net add in Q414 with contracted offers

and contribution of T-50

↑3.1mn

net add

in FY14

Mobile Services Messaging Mobile BB Mobile BB & Services Revenue as % of Turkcell Turkey

YoY

TRY MILLION

9

1 17 54 88

FY11 FY12 FY13 FY14

82 142 238 327 460 684 925 1,253 81% 76% 75% 73% 5% 8% 11% 13%

FY11 FY12 FY13 9M14

Incumbent Turkcell Superonline

TURKCELL SUPERONLINE: PROFITABLE GROWTH CONTINUED

TRY million1

CAGR

↑344% ↑59% ↑40%

• 1.2 million total customers (fiber + ADSL)
• Market leader with total 735K fiber customers

(50K↑ in Q414 & 165K↑in 2014)

• 2.1 million homepasses (380K↑ YoY)
• Turkcell TV+ 60K subscribers

OPERATIONAL HIGHLIGHTS

1 KPIs presented are based on Superonline standalone financials

*Source: Calculated based on ICTA figures (fixed broadband subscribers including cable, excluding ISDN subs)

STRONG FINANCIAL PERFORMANCE

REVENUE EBITDA EBIT MARKET SHARE*

8pp↑

in 3 yrs

10

9% 10% 11% 15% 15% 1% 2%

• 5%
• 5%

7% 6% 3% 7%

FY11 FY12 FY13 Q314 Q414

life:) Operator 1 Operator 2

37% 37% 38% 38% 48% 48% 46% 44% 14% 15% 16% 18%

FY11 FY12 FY13 Q314

UKRAINE: IMPACT OF CHALLENGING MACRO ON FINANCIALS

FINANCIAL PERFORMANCE MARKET ENVIRONMENT

• 97% UAH/USD devaluation in FY14 limited

Astelit’s contribution

• 15% top-line growth in local currency in Q414
• 5.4% revenue contribution (2.7pp ↓ YoY) in

Q414

FINANCIAL HIGHLIGHTS OPERATIONAL HIGHLIGHTS

• Operational performance remained solid
• 10.3 million subscribers
• 1.1 million rise in subscribers YoY in Q414

REVENUE GROWTH (UAH)

(YoY)

SUBSCRIBER* MARKET SHARE

Operator 1 Operator 2 life:)

*3 month active subscriber

11

1

3,850 – 4,050 12,800 – 13,100 ~20%

REVENUE EBITDA OPERATIONAL CAPEX/ SALES*

2015 GUIDANCE PRIORITIES

(*)This estimate is based on our current expectations regarding market conditions and assumption that current market conditions continue in 2015 for each of

• ur different businesses. No assurance can be given that actual results will be consistent with such expectations.

For a discussion of factors that may affect our results, see our latest Annual Report on Form 20-F filed with U.S. Securities and Exchange Commission, and in particular the risk factor section therein.

* Excluding licence fees

TURKCELL GROUP: 2015 PRIORITIES & OUTLOOK

Superior customer experience Operational excellence & productivity Fiber and mobile broadband New products & services

TRY MILLION

12

FINANCIAL REVIEW

Murat Erden Turkcell CFO

NOTICE: Please note that all financial data are consolidated whereas non-financial data are unconsolidated unless otherwise specified. EBITDA is a non-GAAP financial measure. Please refer to the press release for the reconciliation of EBITDA to net cash from operating activities. All non-financial data are unconsolidated, prepared in accordance with IFRS and expressed in US$ and/or TRY. The figures used in this presentation are rounded while percentage changes are calculated based on the figures disclosed in the Q4 & FY2014 result announcement press release.

13

*Voice revenues include outgoing, incoming, roaming and other (comprising almost 1% of Turkcell Turkey) revenues

2,884 3,103 8 144 67

Revenue Q413 Δ in Voice* Δ in Mobile BB&services Δ in Subsidiaries Revenue Q414

Δ in Turkcell Group: ∑ TRY 220 mn Δ in Turkcell Turkey: ∑ TRY 152 mn

Q414 vs. Q413 YoY ↑8%

11,408 12,044 (86) 332 390

Revenue FY13 Δ in Voice* Δ in Mobile BB&services Δ in Subsidiaries Revenues FY14

Δ in Turkcell Group: ∑ TRY 636 mn Δ in Turkcell Turkey: ∑ TRY 246 mn

FY14 vs. FY13 YoY ↑6%

TRY million

TURKCELL GROUP: REVENUE

14

Q414 vs. Q413 YoY ↑8% FY14 vs. FY13 YoY↑6%

*Excluding depreciation and amortization

851 917

220 (152) 5 (7)

EBITDA Q413 Δ in Revenues Δ in Direct cost of revenues* Δ in G&A exp. Δ in S&M exp. EBITDA Q414

3,544 3,762

636 (275) (12) (131)

EBITDA FY13 Δ in Revenues Δ in Direct cost of revenues* Δ in G&A exp. Δ in S&M exp. EBITDA FY14

EBITDA Margin ↑0.1pp EBITDA Margin ↑ 0.1pp

TRY million

TURKCELL GROUP: EBITDA

15

Net income'13 reported

505 2,326

Δ in EBIT 97 172 Δ in Finance Inc./Exp. (327) (847) Δ in Equity in Net Inc./Loss (83) (90) Δ in Taxation (68) (139) Δ in Other 134 443 Net income'14 reported

258 1,865

BeST Impairment (35) (35) Fintur impact (83) (116) A-tel Share Sale Impact (-) 24 Reimbursements (8) (29) ICTA penalties (2) (108) Other one-off impacts (4) (6) Net income'14 excluding one-offs

390 2,135

TURKCELL GROUP: NET INCOME

1 TRY figures are based on IFRS TRY figures

QUARTER YEAR

TRY million1 ↓49% ↓20%

16 TRY MILLION1

2013 2014

Total Cash

8,129 9,032

Total Assets

21,285 23,694

Total Debt

3,333 3,698

Net Cash

4,796 5,334

Total Equity

14,735 16,711

TURKCELL GROUP: FINANCIAL HIGHLIGHTS

1 TRY figures are based on IFRS TRY figures

SUMMARY BALANCE SHEET 60% 40%

18%

82% 13% 87%

Cash Total Debt FX Debt

FX TRY FX TRY Int’l Local

MAJOR CASH OUTFLOW ITEMS IN FY14

• Total Capex: TRY 2,145 mn
• Corporate tax of Turkcell Turkey: TRY 538 mn

CASH & DEBT BREAKDOWN

~$1,562 mn ~$253 mn

17

THANK YOU

For further information please e-mail

investor.relations@turkcell.com.tr

• r call Turkcell Investor Relations at

(+90 212 313 1888)

18

APPENDIX

19

SUMMARY INCOME STATEMENT AS PER CMB1 FINANCIALS

1 Capital Markets Board of Turkey 2 Depreciation and amortization is included

Summary income statement Q4 2013 Q4 2014 YoY (%) 2013 2014 YoY (%) Revenue 2,883.6 3,103.2 8% 11,407.9 12,043.6 6% Direct Cost of Revenues2 (1,848.9) (1,972.2) 7% (7,058.9) (7,380.8) 5% S&M (510.4) (517.8) 1% (1,843.6) (1,974.6) 7% G&A (152.0) (146.8) (3%) (550.3) (562.7) 2% EBITDA 851.5 917.1 8% 3,544.5 3,761.8 6% EBITDA Margin 29.5% 29.6% 0.1pp 31.1% 31.2% 0.1pp Net Income 506.7 257.9 (49%) 2,330.3 1,866.9 (20%)

(TRY MILLION)

20

SUMMARY INCOME STATEMENT AS PER IFRS FINANCIALS

1 Depreciation and amortization is included

($ MILLION)

Summary income statement Q4 2013 Q4 2014 YoY (%) 2013 2014 YoY (%) Revenue 1,417.6 1,382.6 (2%) 5,975.4 5,512.9 (8%) Direct Cost of Revenues1 (905.6) (877.6) (3%) (3,693.3) (3,375.5) (9%) S&M (250.7) (230.7) (8%) (964.1) (903.1) (6%) G&A (74.3) (65.2) (12%) (286.8) (256.8) (10%) EBITDA 420.4 409.1 (3%) 1,858.0 1,725.2 (7%) EBITDA Margin 29.7% 29.6% (0.1pp) 31.1% 31.3% 0.2pp Net Income 254.0 117.5 (54%) 1,228.2 864.9 (30%)

21

CONSOLIDATED BALANCE SHEET

($ MILLION)

Consolidated Balance Sheet ($ mn) 2013 2014 YoY (%) Cash & Bank 3,809 3,895 2% CURRENT ASSETS 5,455 5,739 5% Fixed Assets, Net 3,855 3,597 (7%) Other Long Term Assets 662 882 33% TOTAL NON-CURRENT ASSETS 4,517 4,479 (1%) TOTAL ASSETS 9,973 10,218 2% S/T Debt 845 1,056 25% TOTAL CURRENT LIABILITIES 2,020 2,152 7% L/T Debt 716 538 (25%) TOTAL NON-CURRENT LIABILITIES 1,049 859 (18%) MINORITY INTEREST (85) (165) 94% Share Capital 1,636 1,636

• TOTAL EQUITY

6,904 7,206 4% TOTAL EQUITY AND LIABILITIES 9,973 10,218 2%

22

2.31 2.54 2.90

2.35 2.94 2.82 2012 2013 2014

Average Period-End

CURRENCY TRENDS

USD / TRY EUR / TRY USD / BYR USD / UAH

1.79 1.91 2.19 1.78 2.13 2.32 2012 2013 2014

8.326 8.883 10.255

8.570 9.510 11.850 2012 2013 2014 7.99 7.99 11.87 7.99 7.99 15.77 2012 2013 2014