turkcell the igital perator · 3 3 company overview 1 as of may 17, 2019 subscriber breakdown (m,...
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1
Turkcell The igital perator
May 2019
2
STRATEGIC APPROACH DIGITAL SERVICES
BUSINESS MODEL
HEDGINGQ1 2019 RESULTS
APPENDIX
3 3
COMPANY OVERVIEW
1 As of May 17, 2019
SUBSCRIBER BREAKDOWN (m, Q1 2019)
• THE DIGITAL OPERATOR
• 48.4 MILLION TURKCELL GROUP SUBSCRIBERS in 5 COUNTRIES
• 178 MILLION DIGITAL SERVICES DOWNLOADS GLOBALLY
• 93.7 MILLION DIGITAL SUBSCRIBERS GLOBALLY
• LISTED ON NYSE & BORSA ISTANBUL WITH A $4.1 BILLION MARKET CAP1
2 lifecell Europe GmbH operates in Germany under a “marketing partnership” agreement with Deutsche Telekom (DT). Its subscribers are owned by DT and are also included in the Turkcell Group subscriber figure
0.2
0.6
1.6
9.4
36.6
lifecell Europe
TR Northern Cyprus
Belarus
Ukraine
Turkcell Turkey
2
4
STRATEGIC APPROACH
5
6 6
FOCUS ON CUSTOMER
DIGITAL SERVICES
DIGITAL BUSINESSSOLUTIONS
TECHFIN PLATFORM
OUR CUSTOMERS
WELL-INVESTED INFRASTRUCTURE
MORE TO FOLLOW
7 7
32 MinCalling
12 MinInteracting
37 Min For VOIP users
22 MinReading
79 Min Watching
49 MinListening
2.8 MSearchesper day
63Documents uploaded
per person per day
12 MinPlaying
(Playcell)
33 MinPlaying
(Tavla Go)
30 MinContest time
DELIVERING VALUE WITH DIGITAL SERVICES
TRANSFORMING INTO THE DIGITAL OPERATOR2015 - 2018
State-of-the-art 4.5G Deployment
Organizational Transformation
Sales Channel Transformation
Shaping Techfinin Turkey
Convergence of OTT Services
178 million core app downloads
Note: Times given are in a day unless otherwise indicated.
8
68.6% multiplay customers
93.7 million digital subscribers
TURKCELL GİZLİ
8
DIGITAL SERVICES – INTERNATIONAL LICENSES
TURKCELL GİZLİ
9
PROVIDING END-TO-END ICT SERVICES
PUBLIC & HYBRID CLOUD SERVICES
CYBER DEFENSE & SECURITY OPERATION
SERVICES
DIGITAL TRANSFORMATION SOLUTION & SERVICES
INTEGRATED INDUSTRY DIGITAL SOLUTIONS
DIGITAL BUSINESS SOLUTIONS
TURKCELL GİZLİ
10
3.3MnPaycell app downloads
1.5MnPaycellCards
TECHFIN PLATFORM
5.0MnTotal Paycell
users
1.7Bn TLTotal Transaction
on Paycell in Q119
Money transfer
Utility payments
QR code payment
Mobile wallet
PaycellTop-ups
Carrier Billing
Device Loan
Insurance
Device Leasing
3.6Bn TLLoan
Portfolio
28MnCredit scored
customers
2.9MnRegistered credit cards
POS
TURKCELL GİZLİ
11
WELL-INVESTED INFRASTRUCTURE: FOCUS ON SHARING
21 28Number of cities
In partnership withTürksat & Vodafone
Turkcell (stand-alone)
Turkcell infrastructure
Overlapping
Türksat infrastructure
First in Europe
10 GbpsFiber to the home
The map displays the cities in Turkey where Turkcell offers fiber and cable internet services through its partnership with Türksat and Vodafone. HFC stands for hybrid fiber-coaxial.
3.4 mn 3.4 mn fiber + 3.0 mn cable (HFC)Homepass
12
DIGITAL SERVICES
13 13
DIGITAL SERVICES PLATFORM
DIGITAL COMMUNICATION& ADVERTISING
SMART PLACES & BUSINESS APPLICATIONS
MESSAGING & MARKETPLACE
DIGITAL MEDIA
PAYMENT PLATFORM
INNOVATION
MANAGEMENT DASHBOARD
DIGITAL PARTNERS & TURKCELL SECURE E-COMMERCE
CURATED SERVICES
14 14
PLATFORM of PLATFORMS
TAXI 24/7
SERVICE ASSISTANT
BUSTICKET SALES
15 15
DIGITAL SERVICES COLLABORATION
Paycell enables chat-like money transfer in BiP
Yaani recommends fizy & powers keyword search
in Dergilik
fizy & lifeboxcome «home» with TV+
16 16
DIGITAL EXPERIENCES
Who Wants 1 GB?Shake & Win Surprise Point
To Phygital ExperiencesFrom Classic Campaigns
17 17
BOOSTING THE SERVICES PLATFORM WITH TELCO CAPABILITIES
TechFin built on Turkcell Credit Rating Data
Digital Campaigns use location data & assign telco benefits
BiP App2Network Calls
2nd Number integration
18 18
BiP – COMMUNICATION & LIFE PLATFORM
HD voice & Group video calls
2nd number integration
Discover services & games
Peer-to-peer money transfer
BiP Web
BiP Instant Translate in 106 languages
19 19
fizy – MUSIC
Worldwide music playlists
Live concerts
Video clips
Radio channels
Multiplatform (Apple TV, iOS, Android, Carplay)
20 20
EPL, Bundesliga and NBA broadcast
Save & watch
24 hours timeshift
4K broadcast4K
All screens + Apple TV
TV+
21 21
Dergilik- DIGITAL PUBLISHING
Reading in airplane mode
1.3M daily reading (Q119)
50+ National & local newspapers
1000+ global & local magazines
22 22
lifebox – PERSONAL CLOUD
Face & object recognition
Auto back-up
Free-up space
AI Integrated photo pick
5GB storage space free of charge
Photo print
23 23
Yaani – SEARCH ENGINE & MAIL & ASSISTANT
Search categories
Service integration
Smart algorithms
Location based search
Yaani web
Yaani Mail & Assistant
24 24
Turkcell Data Center Cyber Security Services
SECURE E-COMMERCE WITH CREDENTIALS MANAGEMENT
Fast & SecureLog-in
Traffic Management Content / ServiceProvider
Customer Service
Seamless Payment Experience
CredentialsManagement
25
BUSINESS MODEL HEDGING
26 26
THREE PILLARS OF OUR BUSINESS MODEL HEDGING
INFLATIONARY PRICING FX & INTEREST RATE HEDGING LIQUIDITY
• Key for sustaining growth & margins
• Secure ROI of projects & investments
• Reflecting costs to the prices
• Proven track record
• Keeping all cash in hard currency
• FX hedged for whole maturity, both on principal & interest of loans
• Converted variable to fixed interest
• Strong cash flow for capex needs
• Additional committed lines
• 2.0Bn USD cash* covers principal & interest payments until 2022
56%
44%
Details of Financial Debt (After Hedging)
Local Currency
FX
Principal & Interest Payments**
(Million USD)
100106
115111110
115
125131129130
139136142
147
164158161
100103103106109110112114120123123
128132138
147157
158
Q11
5
Q21
5
Q31
5
Q41
5
Q11
6
Q21
6
Q31
6
Q41
6
Q11
7
Q21
7
Q31
7
Q41
7
Q11
8
Q21
8
Q3
18
Q41
8
Q11
9
TCELL ARPU (exl. M2M) CPI
Turkcell ARPU vs. CPI Trend (Q115=100)
Fixed interest
Variable interest
*Includes Fintur sale proceeds.**Data of Turkcell Group companies, excluding TCF
80%
20%
552 591246 241
1,904297 7
7 6
22
2019 2020 2021 2022 2023+
FX Local Currency
849 598252 247
1,927
27 27
MAJOR FUNDING & HEDGING DETAILS
TYPE & DATE
AMOUNT MATURITY INTERESTPURPOSE OF
FUNDING
Club Loan(September 2015)
US$500Mn
EUR445Mn
2-year grace period, 5-year
maturity
3-month LIBOR/
EURIBOR+ 2.00%
CAPEX and inorganic growth opportunities
Bond(October 2015) US$500Mn 15/10/2025 5.75%
(fixed rate)
China DevelopmentBank(October 2015)
EUR500Mn
EUR750Mn
3-year grace period, 10-year
maturity
EURIBOR + 2.20% Debt restructuring
CAPEX
CAPEX and inorganic growth opportunities
Bond(April 2018) US$500Mn 11/04/2028
5.80%(fixed rate)
Repayment of existing indebtedness
80% hedged with PCCS
7% hedged with PCCS
HEDGING DETAILS
-
-
100% hedged with PCCS
~48% hedged with PCCS &CCS
UTILIZATION
Fully utilizedin Jun 16
-
Fully utilizedin Oct 15
~EUR550 Mn utilized as of March 19
-
EKN-Covered(March 2019) US$150Mn
10-year maturity
1st Tranche: LIBOR+2.10%2nd-3rd Tranche: 5.35%
CAPEX US$50mn utilized as of March 31
-
EUR : EURIBOR + 2.20%USD : LIBOR + 2.22%
CNY : 5.51%
TURKCELL GİZLİ
28
SOLID BALANCE SHEET
NET DEBT/ EBITDA
1 Corresponds to proceeds from the Fintur transaction closed on April 2, 2019.2 Q119 balance includes Fintur sale proceeds.3 Excludes Turkcell Consumer Finance Company’s loan portfolio
TCF loan porfolio
Net Debt2,3
TRY Mn Q4 2018 Q1 2019
Total Cash 7,419 8,888
Due From Related Parties1 - 2,230
Total Assets 42,765 46,079
Total Debt 20,156 22,867
Lease Obligations 1,414 1,410
Total Equity 16,054 17,102
Net Debt2 12,736 11,749
Net Debt3 8,565 8,108
SUMMARY
9,5168,565
8,108
4,790
4,1713,641
1.7x
1.4x
1.3x
1.2x
1.0x0.9x
Q318 Q418 Q119
Net Debt/EBITDA Net Debt/EBITDA
TURKCELL GİZLİ
29
(204)
(301)(255)
(224)
216
Q118 Q218 Q318 Q418 Q119
FX EXPOSURE
8.9Bn TLNominal
34%
10%
49%
7%
50%33%
9%8%
CASH1 DEBT
Before Hedging
2 Including advance payments, hedging and excluding FX swap transactions for TL borrowing. Derivatives (VIOP) and forward transactions are included.
After Hedging
NET FX POSITION2
22.9Bn TL
USD MILLION
Share
1 Excluding FX swap transactions for TL borrowing.
USD EUR TRY Other
79%
21%
30
Q1 2019 RESULTS
TURKCELL GİZLİ
31
5.7 Bn TL 19.2% yoy
Q1 2019: STRONG START TO THE YEAR
178 Mn downloads
2.3 Bn TL40.2% margin
772 Mn TLFintur sale P&L contribution
0.2x impact1.3xLeverage ratio
STRONG TOPLINE RESILIENT EBITDA
THE DIGITAL OPERATOR ASSET-LIGHT STRATEGY
Performance exceeding targets
10 K Participants
265 KDigital participants
TURKEY’S TECH SUMMIT
TURKCELL GİZLİ
32
ConsolidatedTRY Million1 Q1 2018 Q4 2018 Q1 2019 QoQ% YoY %
Revenue 4,762 5,626 5,675 0.9% 19.2%
EBITDA 2,022 2,239 2,281 1.9% 12.8%
EBITDA Margin 42.5% 39.8% 40.2% 0.4pp (2.3pp)
Net Income 501 864 1,224 41.7% 144.5%
Op.Capex/Sales2 11.1% 25.7% 15.6% (10.1pp) 4.5pp
1 TRY figures are based on IFRS.2 Excluding license fees
TURKCELL GROUP FINANCIAL HIGHLIGHTS
• +0.4 pp QoQ improvement in EBITDA margin (+2.2 pp in Turkcell Turkey)
• Capex in line with targets
TURKCELL GİZLİ
33
2,022
2,0222,340 2,304 2,258
2,258 2,281
914(595)
(36) (47) 23
EBITDAQ118
Δ in Revenues
Δ in Direct cost of
revenues**
Δ in G&Aexp.
Δ in S&Mexp.
Δ in net impairmentlosses***
EBITDAQ119
Margin40.2%
4,762
5,675
764
145 30 (26)
RevenueQ118
Δ TurkcellTurkey
Δ TurkcellInternational
ΔTCF* Δ OtherSubsidiaries
RevenueQ119
REVENUE & EBITDA
* Turkcell Consumer Finance Company, Financell ** Excluding depreciation and amortization *** on financial and contract assets
19.2%
REVENUETRY MILLION
• 914 mn TL yearly revenue increase in Q119; Turkcell Turkey is the main growth driver
• Exit from sports betting operations in Azerbaijan in Q418 had c.1% impact on the top-line
• New businesses such as energy contribute to nominal EBITDA growth; yet with a lower margin
• G&A and S&M under control
EBITDA & EBITDA MARGIN
Margin 42.5% 12.8%
TRY MILLION
TURKCELL GİZLİ
34
54.0 55.9
62.8
30.5
33.6
38.1
Q117 Q118 Q119
1.4%1.9%
2.2%
2.9%
1.9%
Q118 Q218 Q318 Q418 Q119Note: TV subscribers and the related net add figure include the total of and the change for 3.6 million of «OTT only» cumulative active users.
TURKEY SUBSCRIBERS (million) ARPU (TL)
MONTHLY AVERAGE MOBILE CHURN RATE
18.7
15.0
Postpaid Prepaid
QoQ -155K↓ 73K↑ 25K↑ 720K↑Net add
55%of total mobile
OPERATIONAL HIGHLIGHTS
* The ARPU of customers who have stayed with Turkcell for at least 14 months.
-44K↓
1.4
0.9
10K
Fixed subscribers
3.2 MnLifecell
subscribers
12.3%YoY
4.1
TV
fiber ADSL
fiber
cable
ADSL
56 KSuperbox
subscribers
19.6%11.7%like-for-like* growth
13.4%Residential fiber
Mobile blended(excl.M2M)
TURKCELL GİZLİ
35
LEADING CAMPAIGNS IN Q119
LEADERSHIP IN QUALITY AND EXPERIENCE
4.5 mn participants/gifts
«#DO» campaign
+9+11
+20+23
Q118 Q119
Points over next best Points over third best
Source: Future Bright
CUSTOMER EXPERIENCE
Turkcell Score 23
2.2 mn first-timer to ourdigital services
Consumer Net Promoter Score (Points)
13.4 mn participants
140 mn gifts
Turkcell’s Shake & Win –specials for the 25th year
36 36
25.8
30.7 31.0
12.516.8
18.5
Q117 Q118 Q119
4.5G subscribers 4.5G compatible smartphone
2.22.9
3.4
4.6
5.8
7.4
3.0
4.4
5.9
Q117 Q118 Q119Non 4.5G Users 4.5G Users Total Users
MOBILE DATA USAGE (Av. GB/User) 4.5G SUBSCRIPTION (million)
GROWTH ENGINE: MOBILE DATA
92% are 4.5G
subscribers
18.5 million with
4.5G compatible SPs
82% are 4.5G
compatible SPs
7.8 GBin Mar 2019
Data consumption continued its pace with a 7.4GB user/month on average
74% smartphone
penetration
37 371: Refers to downloads as of Apr 25, 2019. 2: 3-MAU includes users who utilised the zero rating benefit of Dergilik magazines and newspapers via browser. 3: 3-Month active users also include IPTV users 4: My Account is renamed as Digital Operator in 4Q 2018. 5: Transactions include subsidiary revenues. Active users include direct carrier billing, app and Paycell card customers.
Download1
3-Month Active User
Service KPIs
273K
1.6Mn
36MnGames played
on BiP
DIGITALPUBLISHING2
11.3Mn
12.1Mn
1.3Mn
copies readper day
MUSICPLATFORM
22.5Mn
3.8Mn
8.4Mn
songs streamed per day
MOBILE TV3
12.6Mn
3.6Mn
3.5Mn
TV sessions per day
PERSONAL CLOUD
11.2Mn
3.3Mn
63
docs uploadedper person / day
DIGITAL SERVICES
8.4Mn
4.5Mn
2.8Mn
searchper day
DIGITAL OPERATOR4
40.7Mn
19.9Mn
28%
more ARPU
INSTANT MESSAGING
36.0Mn
10.7Mn
194Mnmessages per day
2.7Mndigitized call
experience per day
PAYMENT PLATFORM5
3.4Mn
5.0Mn
1.7Bn TL
Transactionvolume in Q119
GAMINGPLATFORMS
SEARCH ENGINE
Unique visitor on BiP
5.9MnVisitor on Playcell
For BackgammonGO
TURKCELL GİZLİ
38
Q1 2018 Q1 2019 YoY %
Revenues 212 242 14.2%
Net Income 40 82 106.6%
CONSUMER FINANCE
TECHFIN: NEW GROWTH AND PROFITABILITY ENGINE
124 TL average
monthly installment
95% penetration
of loan insurance2
1,710 TL average
ticket size
2.8% cost of risk1
HANDSET FINANCING
0.4 0.4 0.3
4.4 4.2 3.6
Q118 Q418 Q119
Turkcell Contracted Receivables Financell Consumer Loans
TRY BILLION
4.8 4.54.0
1 per IFRS 2 in the past one year
TRY MILLION
Q1 2018 Q1 2019 YoY %
Revenues 48 60 26.0%
EBITDA 38 43 12.9%
EBITDA Margin 79.2% 70.9% (8.3pp)
TRY MILLION
PAYMENT SERVICES
39 39
TRY MILLION1 Q1 2018 Q1 2019 YoY %
Revenue 279 425 52.0%
EBITDA 93 194 108.6%
EBITDA Margin 33.2% 45.6% 12.4pp
HIGHLIGHTS
1 Figures are based on IFRS
TURKCELL INTERNATIONAL
TURKCELL INT’L REVENUE BREAKDOWN
2 Other comprises lifecell Germany, other international operations and intra-company eliminations. Ukraine, Belarus and Turkish Republic of Northern Cyprus figures are based on stand-alone financials.
65%
19%
11%
5%
• 30% y-o-y ARPU growth
• Growing 4G subscription
• +1 mn 3-month active digital service users
• Digital tariff plan PLAY is launched
Ukraine
Belarus
TR Northern CyprusOther2
TURKCELL GİZLİ
40
7,419 7,305
8,888 8,888
2,281(827)
(1,569) 1,666
(83)
Cash Q418 EBITDA Change in operatingassets/liabilities
Cash flow frominvesting activities
Cash flow fromfinancing activities
Other Cash Q119
LIQUIDITY MANAGEMENT
TRY MILLION1
Q418 vs. Q119
Fintur cash
2,230
1 Figures are based on IFRS.
TURKCELL GİZLİ
41
GUIDANCE REVISED UPWARDS
PREVIOUS
OP. CAPEX / SALES*
TURKCELL GROUP
2019 GUIDANCE
REVENUE GROWTH
EBITDA MARGIN
NEW
16% - 18% 17% - 19%
37% - 40% 38% - 40%
16% - 18%16% - 18%
*Excluding licence fees
42
APPENDIX- Network Dynamics
- International Business
- Regulatory
- Currency Trends
43 43
234.4 MHz
FREQUENCIES BEFORE AND AFTER 4.5G TENDER
TOTAL FREQUENCYBEFORE TENDER
Turkcell Vodafone Türk Telekom
62.0 57.064.8
172.4
82.8
110.2
AWARDED FREQUENCY IN
TENDER
TOTAL FREQUENCYAFTER TENDER
139.8 MHz
175.0 MHz
€0.3
€0.4
€0.5
• Price / MHz / Population in Turkey: €0.12 per MHz per sub cost
44 44
234.4 MHz
FREQUENCY BANDS AFTER 4.5G TENDER
Turkcell Vodafone Türk Telekom
62.0 57.064.8
172.4
82.8
110.2
139.8 MHz
175.0 MHz
Main layer for 4.5G Terminal support, capacity and coverage layer
2600 MHz
2100 MHz
1800 MHz
900 MHz
800 MHz 4.5G main coverage layer
2G/3G coverage and voice layer
Mobile broadband layer for 3G4.5G usage for mid/long term
4.5G capacity boost layer for hot spots
€0.3
€0.4
€0.5
• Price / MHz / Population in Turkey: €0.12 per MHz per sub cost
60.040.0 35.0
70.0
35.0 30.0
59.6
20.070.0
24.8
24.8
20.0
20.0
20.0
20.0
45 45
FASTEST & BEST & WIDEST
SPEED
1,200 Mbps
2018
* Source: https://gsacom.com/paper/progress-gigabit-lte-networks-2/
QUALITY
CarrierAggregationall network
The BestExperts
4x44x4 MIMOall network
MIMO: Multi Input Multi Output
SPEED QUALITY
46 46
DIFFERENTIATED THROUGH QUALITY
Source: IRIS Telecommunication Engineering Services, January 2019
USER EXPERIENCE
82
7574
0-100
DATA SPEED
49
21
13
17
11 10
Download(Mbps)
Upload(Mbps)
Turkcell Telco1 Telco2
47 47
5G
eMBB
eMTC URLLC
Higher Capacity100x
10x Faster Data Rate
10x Lower Latency
5G: MORE THAN HIGHER SPEED
48 48
49.5%
Incumbent48.4%
Other players
2.1%
FIXED BROADBAND MARKET
6.6 6.6 6.8 7.27.8
8.79.5
0.551.2
1.461.67
1.93
2.29
2.80
0.490.49
0.560.63
0.74
0.83
0.93
10.2%11.0%
11.5%12.1%
13.2%
14.9%
16.3%
2012 2013 2014 2015 2016 2017 2018
xDSL Fiber Cable Penetration
Note: Company calculation based on data in ICTA Q4 2018 Report
13.4 mnTotal
Subscribers
3 majorOperators
16.3%Penetration
TURKISH FIXED BROADBAND MARKET FIXED BROADBAND MARKET BY TECHNOLOGY (MN)
FIBER SUBSCRIBER MARKET SHARE
Q4 2018
49 49
548900
1,276
2,070
2015 2016 2017 2018
Turkcell Superonline (stand-alone) Fiber Backbone
NET REVENUE TREND
24%
CAGR2015-2018
EBITDA TREND
39%
CAGR2015-2018
1,7192,429
3,2104,076
2015 2016 2017 2018
TRY Mn
TRY Mn
899 1,044 1,2041,386
2015 2016 2017 2018
FIBER CUSTOMERS
Fiber market share (%)
50%
thousand
• 44.3 thousand km rollout
• 21 cities
• Data speed up to 10Gbps
• 42% take up rate
• Infrastructure sharing protocol signed by Turkcell, Türk Telekom,
Vodafone TR, Türksat and Telkoder in May
• Bilateral agreements to follow: 3 Mn additional homepass through
Türksat and potential for more
• A new capex model on fixed business
NEW BUSINESS MODEL ON FIXED INFRASTRUCTURE
TURKCELL SUPERONLINE
50 50
9%
Digitürk(beIN) 36%Tivibu
24%
D-Smart14%
CableTV18%
IP TV Subscriber Market Share1
As of Q418
1Source: ICTA Q4 2018 Report2Includes IP TV and OTT TV subscribers
3.6 millionTurkcell TV+ subscribers2 in Q1 2019
SUCCESSFUL IPTV SERVICES
51 51
Tower portfolio:
10,581
Turkey
Ukraine
Belarus
TRNC
8,501
1,132
833
115
• First and only TowerCo of Turkey
• Regional player operating in 4 countries
• Long term, visible revenue stream & strong profitability
• Aim to increase efficiency by consolidating towers in Turkey
338
2018 2019E 2020E 2021E
1.60
2018 2019E 2020E 2021E
25%-30%
1.8x-1.9x
CAGR2019-2021
MediumTerm
TRY mn
Note: Tower portfolio includes owned and managed towers and towers for which contract management services are provided.
GLOBAL TOWER
NET REVENUE TREND
TENANCY RATIO
52 52
5%
10%
15%
20%
25%
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Turkcell Group EEMEA
Source: Bloomberg Industry Data and company announcements*Excluding licence fees
Turkcell Group Average: 17.7%*
EEMEA Average: 17.6%Between 2008 and 2018
CAPEX/SALES TREND
53 53
lifecell PERFORMANCE
HIGHLIGHTS
UKRAINE MOBILE MARKET FACTS*
53.4mTotal
subscribers
3Operators
125% Mobile
Penetration
Ownership 100% Turkcell
Ownership 100% VEON
Ownership 100% MTS
*Source: Global Wireless Matrix Q4 2018 ** MTS Ukraine changed its legal name to Vodafone Ukraine with a marketing agreement
UAH MILLION Q1 2019 YoY% FY18 YoY%
Revenue 1,416 17.2% 5,269 8.0%
EBITDA 816 61.5% 2,762 108.2%
EBITDA Margin 57.6% 15.8pp 52.4% 25.2pp
**
OPERATIONS IN UKRAINE
• Operational performance:
• 6.9 million subscribers in Q1 2019 (3 months active) with UAH 49 ARPU (up 30.0% yoy)
3.9 million 3-month active 3G and 4.5G data users
• 77% SP penetration (market leader)
• +1 million 3-month active digital service users
• First to launch 4G services in Ukraine on 2600 MHz
• 4.5G services on the 1800 MHz frequency since Jul 1st
54 54
49.4%
36.9%
13.7%
KYIVSTAR
VDF
lifecell2%
9%
9%
12%17%
10% 11%14% 17%
20%
3%9% 14%
9%
Q118 Q218 Q318 Q418 Q119
FINANCIALS
41.8% 44.1%
44.6%
76.6%
57.6%
52.7% 54.9% 54.9% 52.7%
56.7% 55.1% 57.5% 55.8%56.7%
Q118 Q218 Q318 Q418 Q119
Mobile Revenue
Subscriber*
(*) 3 month active subscribers
Mobile Revenue Growth (in UAH)(YoY)
lifecell VDF Kyivstar
EBITDA Margin (%)
Source: Company announcements (Q4 2018). Note: lifecell EBITDA margins in 2018 include new IFRS impacts (IFRS 9, 15 and 16)
MARKET SHARE
UKRAINE: MOBILE MARKET PERFORMANCE
49.0%
36.2%
14.8%
KYIVSTAR
VDF
lifecell
55 55*Source: Company calculation based on Q4 2018 results
OPERATIONS IN BELARUS
BeST PERFORMANCE
HIGHLIGHTS
BELARUS MOBILE MARKET FACTS*
11.6mTotal
subscribers
3Operators
121% Mobile
Penetration
Ownership 80% Turkcell20% Belarusian State
Ownership51% Belarusian State49% MTS
Ownership100% Telekom Austria
Q1 2019 YoY% FY18 YoY%
Revenue 31.9 9.2% 124.9 11.7%
EBITDA 7.4 39.6% 27.9 548.8%
EBITDA Margin 23.2% 5.0pp 22.3% 18.5pp
BYN MILLION
• 1.2 million 3 month-active subscribers in Q1 2019
• 4G services since September 2017 (through becloud)
• Expanding digital services footprints
• Launched its new digital offering PLAY, which includes 7 digital
services.
56 56
BELARUS: MOBILE MARKET PERFORMANCE
22%
11%8% 8%
9%
18%
11%8% 7%
21%
16% 17%19%
Q118 Q218 Q318 Q418 Q119
47.3%
46.5%
6.3%
MTS
VELCOM
LIFE :)
Source: Company announcements (Q4 2018).
Subscriber*
Revenue
(*) 3 month active subscribers
47.4%
42.0%
10.7%
MTS
VELCOM
life :)
life :) EBITDA Margin Trend*
Mobile Revenue Growth (in BYN)(YoY)
18.2%14.4%
17.1%
38.6%
23.2%
Q118 Q218 Q318 Q418 Q119
LIFE:) VELCOM MTSMARKET SHARE FINANCIALS
Note: life :) EBITDA margins in 2018 include the impacts of IFRS 9, 15 and 16
57 57
10%
20%
30%
40%
50%
60%
70%
Turkey Hungary Jordan UK Croatia Greece Italy Spain Egypt
Special Communication Tax (SCT) 7.5% 7.5%
VAT 18% 18%
Treasury Share1 15% 1%
TRX fees 5%(of net sales)
-
Contribution Share to Telecom Authority
0.35% 0.35%
New subscription SCT2
(at first enrollment)TRY 65.00 -
Wireless license fees (per acquisition)
TRY 27.86 -
Wireless usage fees (annual)
TRY 27.86 -
TAX MOBILE FIXED TURKEY HAS THE WORLD’S HIGHEST MOBILE SERVICE TAXES3
1Under the license agreement Turkcell pays a treasury share equal to 15% of its gross revenue from Turkish GSM operations2 Excluding M2M SIMs3 GSMA/Turkey Report, 2016
TAXATION IN TURKEY
58 58
13.6
9.1
6.6
3.1 3.1 3.12.5 2.5 2.5 2.5 2.5 2.5
17.2 15.714.4
11.1 11.1
8.16.5
4.94.8 4.2 4.4 4.5
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
MTR -Turkcell Europe-MTR
MTR: Mobile Termination RateSource: BEREC July 2017 report, Cullen International
EVOLUTION OF MTR TRY kuruş per min.
MTR RATESTRYkr.
OLD Since 2013 Asymmetry OLD Since 2013 Asymmetry
Turkcell 3.13 2.50 - 1.70 0.43 -
Vodafone TR 3.23 2.58 3% 1.73 0.43 -
TTKOM 3.70 2.96 18% 1.87 0.47 9%
Mobile Voice Rates SMS Rates
Turkcell MTR is 1.8x below EU
MOBILE/SMS TERMINATION RATES IN TURKEY
59 59
CURRENCY TRENDS
3.02 3.324.11
5.606.08
3.183.71
4.52
6.03 6.32
2015 2016 2017 2018 Q119
Average Period-End
2.73 3.013.63
4.765.34
2.913.52 3.77
5.265.63
2015 2016 2017 2018 Q119
1.591.98 1.93 2.03 2.15
1.86 1.96 1.972.16 2.13
2015 2016 2017 2018 Q119
21.7925.56 26.64 27.32 27.41
24.0027.19 28.07 27.69 27.25
2015 2016 2017 2018 Q119
USD / TRY EUR / TRY
USD / BYN USD / UAH
60 60
This presentation may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the SecuritiesExchange Act of 1934 and the Safe Harbor provisions of the US Private Securities Litigation Reform Act of 1995. This includes, in particular, our targetsfor revenue, EBITDA and capex in 2019 or for the medium term 2018 to 2020. More generally, all statements other than statements of historical factsincluded in this presentation, including, without limitation, certain statements regarding the launch and goals of our payment card business, ouroperations, financial position and business strategy may constitute forward-looking statements. In addition, forward-looking statements generally canbe identified by the written 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 thatsuch expectations will prove to be correct. All subsequent written and oral forward-looking statements attributable to us are expressly qualified in theirentirety by reference to these cautionary statements. For a discussion of certain factors that may affect the outcome of such forward lookingstatements, see our Annual Report on Form 20-F for 2018 filed with the U.S. Securities and Exchange Commission, and in particular the risk factorsection therein. We undertake no duty to update or revise any forward looking statements, whether as a result of new information, future events orotherwise.
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 in relation to the accuracy or completeness of the information contained in this presentation or any other writtenor 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 tablesused in this presentation totals may not foot due to rounding differences. The figures used in this presentation are rounded while percentage changesare calculated based on the figures disclosed in the press release.
NOTICE
61
THANK YOU
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