osman yılmaz - turkcell

Financial Highlights

Capital Markets Day 2019

Osman Yılmaz

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Capital Markets Day 2019Financial Highlights

My Agenda For Today

Financial Targets1

Key Priorities of Turkcell Finance2

Sustainable Revenue Growth


73

13%-16%

TurkcellGroup

13%-16%

12%-15%

16%-19%

FY20-FY22 Guidance(CAGR)

TURKCELLTURKEY

TURKCELLINTERNATIONAL

OTHERSUBSIDIARIES

ARPU Growth

Customer GrowthDigital Business

Solutions

life :) 4GTechfin

SolutionsEnergy

Business

Digital servicesusage growth

Rising 4Gusage

Digital Services

EBITDA & EBIT Margin Outlook


TURKCELL GROUP

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FY20-FY22 Guidance

32% 32% 35%41%

2015 2016 2017 2018 2019E

19% 17% 21% 21%

2015 2016 2017 2018 2019E

EBITDA Margin (%)

EBIT Margin (%)

39%-42%

18%-21%

41%-42%

20%-21%

9511,092 1,019

829

20.3%23.0%

21.0%18.5%

2015 2016 2017 2018 2019E 2022E

Operational Capex* (US$ mn) Op. Capex / Sales* (%)

Capital Expenditures


*Excluding license 75

MOBILENETWORK

FIBER INFRASTRUCTURE

DATACENTERINVESTMENTS

RENEWABLE ENERGYINVESTMENTS

Capex kept under control despite the currency headwinds

16%-18%FY20-FY22 Guidance

~2pp FX impact

~18%

Turkcell Finance Key Priorities


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InflationaryPricing

Effective Balance Sheet

Risk Management

Strong Free Cash Flow

Generation

Efficient Capital Allocation

Inflationary Pricing


100 105113

119 118 119126 124

129134

149144 147

157

175

100 101 103 105110 113 114 118 122

127136

145 146 150 154

Q116

Q21

6

Q31

6

Q41

6

Q117

Q21

7

Q31

7

Q41

7

Q118

Q21

8

Q31

8

Q41

8

Q119

Q21

9

Q31

9

TCELL ARPU (exl. M2M) CPI

Q116

Q21

6

Q31

6

Q41

6

Q117

Q21

7

Q31

7

Q41

7

Q118

Q21

8

Q31

8

Q41

8

Q119

Q21

9

TCELL Operator 1 Operator 2

TURKCELL ARPU VS. CPI TREND MOBILE ARPU COMPARISONQ116=100Company and TUIK announcements

Q116=100Based on ICTA market report

Key for sustaininggrowth & margins

Secure ROI of projects & investments

Reflecting coststo the prices

ARPU growth above competition

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Effective Balance Sheet Risk Management


294590

250 299

1,913

326

Q419 2020 2021 2022 2023+

FX Local Currency

620 590250 299

1,913

• US$1.9 Bn equivalent of cash holdings covers maturities until 2023• Strong free cash flow generation• Committed lines of US$100 million

• Almost all cash in hard currency • 50% of FX denominated debt is hedged• Hedging for whole maturity (principal & interest)

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LIQUIDITY MANAGEMENT NET FX POSITION

Principal & Interest Payments1

(1) Data of Turkcell Group, excluding consumer finance business.

Dec15 Dec16 Dec18 Dec19

Short FX

position

Limited Short FX

position

Positive/Neutral FX

positionUS$ Mn

-0.1

-2.5 -2.2

-0.7

0.01

2014 2015 2016 2017 2018 2019E 2020E 2021E 2022E

4.5GInvestment period

Strong Free Cash Flow Generation


FREE CASH FLOW GENERATION*21.3

2018 2019E 2022E

41.3%

2018 2019E 2022E

39%-42%

18.5%

2018 2019E 2022E

16%-18%

TRY BnSUSTAINABLEREVENUE GROWTH

PRESERVE OPERATIONAL PROFITABILITY

CAPEX UNDER CONTROL

TRY Bn

79

13%-16%

9M19 TRY1.5 Bn

*Free cash flow calculation includes EBITDA per IFRS reports and the following items as per cash flow statement of IFRS reports; acquisition of property, plant and equipment, acquisition of intangible assets, change in operating assets/liabilities, payment of lease liabilities and income tax paid as per cash flow statement of IFRS reports.The graph for the expected figures of FCF are illustrative.

Improving Leverage


Improve leverage till the next investment cycle for 5G

NET DEBT/ EBITDA

1.3x1.4x

1.0x

0.6x

1.0x

0.7x

Dec-17 Dec-18 Sep-19 Dec-22E

Net Debt/EBITDA Net Debt/EBITDA*

80

• Deleveraging of consumer finance business

• Consumer loan portfolio to decline to ~TRY2.5 billion YE 2019

• Strong cash flow generation

• EUR353 million of proceeds from Fintur stake sale

*Excludes Turkcell’s Consumer Finance Company’s loan portfolioNet Debt/EBITDA trend after September 2019 is illustrative.

Efficient Capital Allocation


Reduce funding needsin capex heavy traditional business

Invest in new high growth areas

Global Telco Industry Challenges

Flow of funds

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Turkcell’sResponses

Digital services (TV, music, etc.)

Techfin services

ICT solutions (datacenter, cloud etc.)

IPO/M&A activities

Infrastructure sharing

Sell & leaseback transactions

Heavyinvestment

need

Slowrevenuegrowth

Improve returns over WACC81

Paycell: Turkey’s Leading Techfin Company


POTENTIAL ACTIONS

• Established in 2015, fully owned by Turkcell

• Standalone payment and e-money company

• Payment institution and e-money licenses from BRSA

• Mobile payment solutions in several verticals

• Share know-how

• Invest jointly

• Diversify risk

STRATEGIC PARTNER

INORGANIC GROWTH

• Acquire local techfin companies

to expand vertical solutions

• Look for synergies

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Turkcell Superonline: Turkey’s Fastest Fiber


548900

1,2762,070

2015 2016 2017 2018

1,7192,429

3,2104,076

2015 2016 2017 2018

NET REVENUE TREND EBITDA TREND TRY Mn TRY Mn

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• 45 thousand km rollout, 21 cities

• 1.5 Mn fiber customers

• Data speed up to 10Gbps

• Infrastructure sharing (Turksat & Vodafone)

• 3.5 Mn fiber homepass

INITIAL PUBLIC OFFERING

• More transparent articulation

of equity story

• Diversify risk

• Invest jointly

• Share know-how

STRATEGICPRE-IPO PARTNER

INORGANIC GROWTH

• Acquire local or regional fiber assets,

smart-home and security companies

• Look for synergies

INFRASTRUCTURE SHARING

• Asset light model

POTENTIAL ACTIONS

Global Tower: Turkey’s First & Only TowerCo


Note: Tower portfolio includes owned and managed towers and towers for which contract management services are provided.

68 112 139223

2015 2016 2017 2018

168 212 257338

2015 2016 2017 2018

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NET REVENUE TREND EBITDA TREND TRY Mn TRY Mn

• First and only TowerCo of Turkey

• Tower portfolio of 10,878 (owned + right of use)

• Regional player operating in 4 countries

• Long term, visible revenue stream & strong profitability • More transparent articulation of equity story

POTENTIAL ACTIONS

INFRASTRUCTURE SHARING

INITIAL PUBLIC OFFERING


Tenancy ratio

1.7x

87207

346

803

2015 2016 2017 2018

Datacenters: Largest White Space Capacity in Turkey


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• 111k m2 datacenter space

• 33.5k m2 white space

• 8 locations

• Ankara datacenter: 44k m2 datacenter space, 12k m2 white space

• Gebze datacenter: 33k m2 datacenter space, 10k m2 white space

• İzmir datacenter: 15k m2 datacenter space, 2.4k m2 white space

CUMULATIVE DATACENTER INVESTMENTS

TRY Mn


FUTURE FUNDING

SELL AND LEASE BACK

FREE CASH FLOW GENERATION


Road Ahead: 2020-2022 Ambitions

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REVENUE GROWTH (CAGR) 13%-16%

EBITDA MARGIN 39%-42%

OP.CAPEX/SALES* 16%-18%

EBIT MARGIN 18%-21%

*Excluding license

2020-2022

Capital Markets Day 2019

Notice

This presentation may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934 and the SafeHarbor provisions of the US Private Securities Litigation Reform Act of 1995. This includes, in particular, our targets for revenue, EBITDA, EBIT and capex in 2019 or for the medium term 2020to 2022. More generally, all statements other than statements of historical facts included in this presentation, including, without limitation, certain statements regarding the launch of newbusinesses, our operations, financial position and business strategy may constitute forward-looking statements. In addition, forward-looking statements generally can be identified by thewritten or oral use of forward-looking terminology such as, among others, "will," "expect," "intend," "estimate," "believe", "continue" and “guidance”.

Although Turkcell believes that the expectations reflected in such forward-looking statements are reasonable at this time, it can give no assurance that such expectations will prove to becorrect. All subsequent written and oral forward-looking statements attributable to us are expressly qualified in their entirety by reference to these cautionary statements. For a discussionof certain factors that may affect the outcome of such forward looking statements, see our most recent Annual Report on Form 20-F filed with the U.S. Securities and ExchangeCommission, and in particular the risk factor section therein. We undertake no duty to update or revise any forward looking statements, whether as a result of new information, futureevents or otherwise.

This presentation includes business and market information derived from public sources and our own estimates that we believe is indicative of trends in our business and markets, but thathas not necessarily been prepared under our generally applied accounting standards and has been subject to adjustments, and thus should not be relied upon as conclusive. Thispresentation also contains Non-GAAP financial measures, notably EBITDA, which is not a measure of financial performance under IFRS and is not a substitute for net earnings (loss) as ameasure of performance. The Company makes no representation as to the accuracy or completeness of the information contained in this presentation, which remains subject toverification, completion and change. No responsibility or liability is or will be accepted by the Company or any of its subsidiaries, board members, officers, employees or agents as to or inrelation to the accuracy or completeness of the information contained in this presentation or any other written or oral information made available to any interested party or its advisers.

Please note that all financial data are consolidated whereas non-financial data are unconsolidated unless otherwise specified. In the charts or tables used in this presentation totals maynot foot due to rounding differences. The figures used in this presentation are rounded.

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osman yılmaz - turkcell

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