TURKCELL SECOND QUARTER OF 2015 July 30, 2015 1 NOTICE This - - PowerPoint PPT Presentation

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TURKCELL

SECOND QUARTER OF 2015 July 30, 2015

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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

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BUSINESS OVERVIEW

Kaan Terzioğlu Turkcell CEO

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TURKCELL GROUP: PROGRESSING ON OUR PRIORITIES

SOLIDIFYING OUR POSITION IN TURKEY

 New organization structure  More efficient supply chain

POSITIONING AS AN INTEGRATED COMPANY

 Integrated network: Mobile & Fiber  Integrated sales & marketing for mobile and fixed businesses  Focused on end-to-end customer experience

EVALUATING OUR OPTIONS FOR SUBSIDIARIES

 Purchased 44.96% of our subsidiary in Ukraine for $100 million  Completed debt restructuring of Astelit & eliminated currency risk in

a volatile market

PRIORITIES PROGRESS

UPCOMING NEAR-TERM AGENDA

• Optimizing capital structure
• Improving working capital need
• Evaluating subsidiary performance and M&A options
• Spectrum auction in Turkey

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Q2 2015 TRY MILLION1

Revenue

2,835

9.2%

205 (23.6%) 54

(10.7%) 3,093 5.8%

% in Total 91.6% 2.8pp 6.6% (2.6pp) 1.7% (0.3pp) 100%

• EBITDA2

915

11.9%

56

(12.9%)

25

(5.4%) 995 9.7%

EBITDA Margin 32.3% 0.8pp 27.2% 3.3pp 45.8% 2.5pp 32.2% 1.2pp

Net Income

585

22.1%

109

n.m

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(1.6%)

712

44.6%

TURKCELL GROUP: OVERVIEW OF BUSINESS LINES

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 operating activities

TURKCELL TURKEY

YoY %

OTHER SUBSIDIARIES

YoY %

TURKCELL INTERNATIONAL

YoY %

TURKCELL CONSOLIDATED

YoY %

HIGHLIGHTS OF THE SECOND QUARTER

• Turkcell Turkey: Strong growth driven by growth in mobile (↑47.2%) & fixed broadband (↑30.1%)
• Turkcell Int’l: YoY depreciation of UAH and BYR led to decline in revenues & EBITDA
• Consolidated: Record high second quarter revenue, EBITDA and net income

₋ Consolidated net income increased 44.6% yoy due to strong operational performance along with translation gain in Q215 (TRY 261 mn) while translation loss (TRY 165 mn) recorded in Q214

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507 532 550 93 71 92 Q214 Q115 Q215 2,008 2,122 2,206

TRY million

2,595 2,711 2,835

Q214 Q115 Q215 TURKCELL TURKEY1 CONSUMER CORPORATE WHOLESALE

TRY million

Q215

YoY Growth

↑9.9% ↑2.8%

yoy

↑9.5%

yoy

↑9.2%

yoy

↑8.6% ↓1.2%

1 Turkcell Turkey revenues include eliminations

TURKCELL TURKEY: SEGMENT PERFORMANCE

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BREAKDOWN OF SMS, SERVICES & SOLUTIONS REVENUES

164 136 139 105 142 156 Q214 Q115 Q215

SMS Services & Solutions

434 606 638 179 220 233 Q214 Q115 Q215

Mobil broadband Fixed broadband

52% 31% 10% 4% 3%

TRY 2,835 mn

Data ↑42.2% Voice ↓4.2%

YoY Growth

SMS, Services & Solutions ↑9.6% Other* ↑22.0%

TURKCELL TURKEY: REVENUE BREAKDOWN

REVENUE BREAKDOWN Q215 BREAKDOWN OF DATA REVENUES Consumer&Corporate Wholesale ↓1.2%

↑9.2%

yoy ↑30.1% ↑47.2% ↓15.3% ↑48.9%

YoY Growth YoY Growth TRY Million TRY Million TRY Million

*Other includes Turkcell Satış (retail store in telecommunications), Global Bilgi (call center services), Rehberlik Hizmetleri (information services) and Turkcell Teknoloji (research and development)

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TURKCELL TURKEY: OPERATIONAL HIGHLIGHTS

SUBSCRIPTION

47% 37% 33% 53% 52% 51% 12% 16%

Q214 Q115 Q215 Single Play Double Play Triple Play Share in total subscribers

FIBER NET ADDITIONS MULTIPLAY3

~140K

TOTAL

34.0 mn

PREPAID ↓624K

ADSL

QoQ NET ADD

MOBILE

18.1 mn 15.9 mn

POSTPAID

↑334K ↓290K

FIBER FIXED

1.3 mn

↑42K

TV1 ↑40K

↑74K

1 TV subscribers are also included in total fiber subscribers 2 Fixed residential ARPU of Fiber and ADSL blended 3 Triple play consists of fixed voice, fixed data and TV. Totals may have rounding differences 4 Including mobile TV and web TV users

818K 528K

↑32K

Total TV4 ~210K

ARPU

↑8.6% YoY TRY24.0

ARPU2 ↑1.9% YoY TRY47.9

39 33 50 41 42 11 22 14

• 2

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Q214 Q314 Q414 Q115 Q215

Turkcell Superonline TTNet

Market Share

↓47% ↑53%

Thousand

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Total Telecom Market

TURKCELL TURKEY: REVENUE SHARE TREND

46.3% 45.3% 44.3% 35.0% 35.6% 35.6% 18.6% 19.1% 20.1% Q213 Q214 Q215

Vodafone Turkcell Turkey Turk Telekom Group

REVENUE SHARE OF MAJOR PLAYERS1

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Q214 Q215 YoY% Revenue 163 190 16.7% EBITDA 0.7 4 500.0%

EBITDA Margin 0.4% 2.2% 1.8pp

• UAH/USD appreciated 10% QoQ
• Solid operational performance
• 10.6 million subscribers1 (↑11.6% yoy)
• 293K quarterly net adds

TURKCELL INTERNATIONAL:OPERATIONS IN UKRAINE AND BELARUS

UAH MILLION

Q214 Q215 YoY% Revenue 961 1,076 11.9% EBITDA 277 324 16.9%

EBITDA Margin 28.9% 30.2% 1.3pp

ASTELIT

BYR BILLION

BeST 2

• BYR/USD devaluated 4% QoQ
• 1.1 million subscribers 1
• 26.7K net add

HIGHLIGHTS OF ASTELIT HIGHLIGHTS OF BeST

(1) 3m active subscribers (2) As Inflationary accounting is ended starting from Q115, Q214 figures presented in the table are not inflation adjusted for comparative purposes

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Acquired 44.96% stake of Astelit for US$ 100 million Restructured Astelit’s debt

• Eliminated foreign currency risk on P&L
• Manageable debt level: 3.6 billion UAH

STRENGTHENING OUR POSITION IN THE REGION

100% owned by Turkcell

Became the first operator to launch 3G+ in Ukraine on June 4th

• Ability to provide 3G services to ~2.7 million

customers

• Strong demand underlined by growth trend in data
• 43% smartphone penetration (3-month active)
• 16% data as a percentage of revenues
• Flexibility in decision making to strengthen our position in

the region

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REVENUE 12,800 – 13,100 6%-9% growth EBITDA 3,850 – 4,050 31%-32% margin OPERATIONAL CAPEX / SALES ~20%

TURKCELL GROUP: 2015 GUIDANCE ON TRACK

TRY MILLION

GUIDANCE*

** REMARKS

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

For Business Discussion & Strategy SAVE THE DATE! November 9, 2015 London «TURKCELL Capital Markets Day»

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FINANCIAL OVERVIEW

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 Q2 2015 result announcement press release.

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907 995 170 (85) (15) 18

EBITDA Q214 Δ in Revenues Δ in Direct cost of revenues* Δ in G&A exp. Δ in S&M exp. EBITDA Q215

TURKCELL GROUP: REVENUE & EBITDA DEVELOPMENT

TRY MILLION

*Excluding depreciation and amortization

REVENUE EBITDA

TRY MILLION

2,923 3,093 239 (63) (6)

Revenue Q214 Δ in Turkcell Turkey Δ in Turkcell International Δ in Other Subsidiaries Revenue Q215

Revenue ↑5.8%

EBITDA Margin ↑1.2pp

Astelit (43)

EBITDA ↑9.7%

Margin 31.0% Margin 32.2%

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TRY MILLION

Q2 2014 Q2 2015 YoY%

EBITDA

907 995 9.7%

Depreciation and amortization

(386) (410) 6.0%

Net finance inc / (exp)

47 397 752.1%

Share of profit of associates

74 94 27.4%

Other inc/ (exp)

(92) (123) 34.1%

Monetary gains / (losses)

60

• Non-controlling interests

50 (101) (302.6%)

Income tax exp

(167) (141) (15.6%) Net Income 492 712 44.6%

TURKCELL GROUP: NET INCOME

NET INCOME DEVELOPMENT 12.6% 16.8% 23.9% 8.3% 4.7% 23.0%

Q114 Q214 Q314 Q414 Q115 Q215

NET INCOME MARGIN

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TURKCELL GROUP: BALANCE SHEET HIGHLIGHTS

• 1.2
• 1.4
• 1.4
• 1.1
• 0.07

2012 2013 2014 Q115 Q215

NET DEBT/EBITDA2

TRY MILLION Q2 2014 Q2 2015 Total Cash 7,917 4,298 Total Assets 21,767 20,661 Total Debt 3,460 4,014 Net Cash 4,457 284 Total Equity 15,545 13,499

SUMMARY BALANCE SHEET

After dividend payment

MAJOR CASH OUTFLOW ITEMS

 Dividend (2010-2014) TRY3,925 mn  Capex1 TRY957 mn  Corporate tax payment of Turkcell Iletisim TRY218 mn  Increase in trade payables TRY236 mn

1 Including operational and non-operational capex 2 Annualized EBITDA used for Q115 and Q215

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THANK YOU

For further information please e-mail

investor.relations@turkcell.com.tr

• r call Turkcell Investor Relations at

(+90 212 313 1888) Please download our IR app via below QR codes For Android For iOS

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APPENDIX

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SUMMARY INCOME STATEMENT AS PER CMB1 FINANCIALS

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

Summary income statement Q2 2014 Q1 2015 Q2 2015 YoY (%) QoQ (%) Revenue 2,923.0 2,978.2 3,092.9 6% 4% Direct Cost of Revenues2 (1,788.7) (1,828.0) (1,897.2) 6% 4% S&M (477.2) (476.3) (458.9) (4%) (4%) G&A (135.8) (140.8) (150.4) 11% 7% EBITDA 907.0 926.8 994.8 10% 7% EBITDA Margin 31.0% 31.1% 32.2% 1.2pp 1.1pp Net Income 492.7 141.6 712.5 45% 403%

(TRY MILLION)

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SUMMARY INCOME STATEMENT AS PER IFRS FINANCIALS

1 Depreciation and amortization is included

($ MILLION)

Summary income statement Q2 2014 Q1 2015 Q2 2015 YoY (%) QoQ (%) Revenue 1,378.7 1,209.9 1,163.9 (16%) (4%) Direct Cost of Revenues1 (843.9) (743.0) (714.4) (15%) (4%) S&M (225) (193.3) (172.8) (23%) (11%) G&A (64.1) (57.2) (56.6) (12%) (1%) EBITDA 427.8 376.6 374.3 (13%) (1%) EBITDA Margin 31.0% 31.1% 32.2% 1.2pp 1.1pp Net Income 232.5 48.1 268.5 15% 458%

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CONSOLIDATED BALANCE SHEET

($ MILLION)

Consolidated Balance Sheet ($ mn) 2Q 2014 1Q 2015 2Q 2015 YoY (%) QoQ (%) Cash & Bank 3,728 3,131 1,600 (57%) (49%) CURRENT ASSETS 5,673 5,120 3,507 (38%) (32%) Fixed Assets, Net 3,671 3,276 3,393 (8%) 4% Other Long Term Assets 907 791 791 (13%) 0% TOTAL NON-CURRENT ASSETS 4,578 4,067 4,184 (9%) 3% TOTAL ASSETS 10,251 9,186 7,691 (25%) (16%) S/T Debt 1,106 1,371 1,267 15% (8%) TOTAL CURRENT LIABILITIES 2,075 3,732 2,150 4% (42%) L/T Debt 524 211 228 (56%) 8% TOTAL NON-CURRENT LIABILITIES 855 501 516 (40%) 3% MINORITY INTEREST (138) (203)

• 223

62% 10% Share Capital 1,636 1,636 1,636 0% 0% TOTAL EQUITY 7,321 4,953 5,025 (31%) 1% TOTAL EQUITY AND LIABILITIES 10,251 9,186 7,691 (25%) (16%)

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2.31 2.54 2.90 2.92 2.35 2.94 2.82 2.98 2012 2013 2014 2Q15

Average Period-End

CURRENCY TRENDS

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

1.79 1.91 2.19 2.66 1.78 2.13 2.32 2.69 2012 2013 2014 2Q15 8,326 8,883 10,255 14,801 8,570 9,510 11,850 15,346 2012 2013 2014 2Q15 7.99 7.99 11.87 21.44 7.99 7.99 15.77 21.02 2012 2013 2014 2Q15

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TRY MILLION

Q2 2013 Q2 2014 Q2 2015 TURKCELL GROUP 2,855 2,923 3,093

TURKCELL TURKEY1

2,526 2,595

2,835

CONSUMER

1,995 2,008

2,206

CORPORATE

465 507

550

WHOLESALE

79 93

92

TURKCELL INTERNATIONAL

286 268 205

OTHER SUBSIDIARIES2

43 60 54

TURKCELL GROUP: HISTORICAL REVENUE BREAKDOWN