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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 of new information, future events or otherwise. Please note that all financial data are consolidated whereas non-financial data are unconsolidated unless otherwise specified.
NOTICE
2
TRY MILLION1 Q2 2012 Q2 2013 Growth YoY %
H1 2012 H1 2013 Growth YoY %
Revenue 2,565 2,855 11% 4,947 5,544 12%
EBITDA2 779 869 12% 1,482 1,677 13%
EBITDA Margin 30.4% 30.4% - 30.0% 30.2% 0.2pp
EBIT 436 502 15% 805 950 18%
Net Income 534 556 4% 1,049 1,122 7%
TURKCELL GROUP: FINANCIAL HIGHLIGHTS
4
QUARTER
HIGHLIGHTS OF THE SECOND QUARTER
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.
• Double-digit revenue, EBITDA and EBIT growth continued year-on-year led by Turkcell Turkey and subsidiaries
• Highest quarterly and first half revenue ever
HALF YEAR
5
TRY MILLION1 TURKCELL TURKEY
TURKCELL SUPERONLINE
ASTELIT
Revenue 2,318 8% 223 37% 207 16%
EBITDA 698 9% 58 78% 66 22%
EBITDA Margin 30.1% 0.2pp 26.1% 6.0pp 31.8% 1.5pp
EBIT 459 11% 13 331% 11 185%
% of Group Revenues 81% 8% 7%
Q2 20132
TURKCELL GROUP: IMPROVEMENT IN MAJOR BUSINESS LINES
1 TRY figures are based on IFRS TRY figures 2 Standalone figures, does not include consolidation eliminations * Other revenue and EBITDA were TRY107 million and TRY47 million
YoY % YoY % YoY %
6
TURKCELL GROUP: KEY REVENUE GROWTH DRIVERS
1 Voice revenues include other revenues which totals less than 2% of Turkcell Turkey
• Voice1
• Mobile Broadband
Subsidiaries
↑4%
↑42%
↑29%
Turkcell Turkey
Turkcell Group ↑11%
Q2 2013 (YoY GROWTH)
TURKEY: REGULATION &COMPETITION
7
• Major regulatory decisions effective from H213
- Increase in minimum on-net voice & SMS price of Turkcell
- Decrease in voice and SMS MTRs
TRY kurus Before Current Change
Minimum onnet voice price 3.13 4.28 37%
Minimum onnet SMS price - 0.73 -
Voice MTR 3.13 2.50 (20%)
SMS MTR 1.70 0.43 (75%)
Turkcell to be adversely impacted by the regulatory changes
REGULATION COMPETITION
• Volatile pricing environment continued to prevail
- Competitors continued to
- push for lower prices
- high incentives through bundled packages
Turkcell continues to differentiate through innovation & operational
excellence
TURKCELL TURKEY: LEADING TECHNOLOGY THROUGH INNOVATION
*The test was carried out with the permission of the ICTA 8
RECORD 4G SPEED NEW TURKCELL SMARTPHONE T40
• Turkey’s first domestic smartphone (designed by Turkcell Technology) to be introduced to market in September
• Android 4.1 operating system
• NFC enabled
• Turkcell reached 891.6 mbps speed at
LTE Advanced (4G) data speed test *
9
TURKCELL TURKEY: LEADING TECHNOLOGY THROUGH INNOVATION
URFAKART
MOBILE TICKET
SMS+
SMARTMAP
MOBILE FAX
SMART VEHICLE
CONSUMER CORPORATE
9
Fax documents thru mobile
Manage your fleet with real-time reports
First in Turkey; analyze, locate and target your
customer
Pay with your mobile
First in Turkey; directing, blocking,
archiving SMS
First in FIFA history; buy tickets and enter games thru mobile
NEW PRODUCTS & SERVICES LAUNCHED IN THE FIRST HALF
ARPU (TRY) Q2 2012 Q2 2013 Growth YoY %
Postpaid 37.7 37.9 0.5%
Prepaid 11.3 12.2 8.0% 67%
33%
13.8
20.9
Postpaid Prepaid
TURKCELL TURKEY: OPERATIONAL IMPROVEMENT THROUGH VALUE FOCUS
SUBSCRIBER BLENDED ARPU & MoU
20.7 22.3
250
269
2Q12 2Q13
ARPU (TRY) MoU (min)
↑8%
in ARPU YoY
10
SHARE IN REVENUES (Q213)
Postpaid net add
↑293K in Q213
Total: 34.7
million
Postpaid share
↑2pp YoY
MILLION
Total subscriber
↓191K in Q213
TURKCELL TURKEY: SOLID DATA GROWTH CONTINUED
11
SMARTPHONES
MILLION
MOBILE BROADBAND
60
107
166
240
340
3% 5%
8%
11%
15%
Q209 Q210 Q211 Q212 Q213
Revenue % in Turkcell Turkey
TRY MILLION
• Total mobile broadband & service revenues
reached TRY653 million; 28% of the Turkcell Turkey total
4.8 6.9 7.6
15%
22% 24%
Q212 Q113 Q213
Number of Smartphones Penetration
↑620K QoQ
Revenue
↑6X since 3G
↑42% YoY
Note: Smartphone numbers are calculated based on GFK’s definition (i.e. terminals with open operating system and hard/soft qwerty keyboard)
TURKCELL SUPERONLINE: CONTINUED FIBER INVESTMENTS
12
• 32,000 km of fiber network
• The only operator providing 1000 Mbps residential service in Turkey
• Synergies with Turkcell: Total telecom solutions strategy
1.5 million ~500K
FTTH SUBSCRIBERS HOMEPASS
TOTAL HOUSEHOLDS IN TURKEY
18 MILLION
2,9 Mbps
25 Mbps
1000 Mbps
Turkey Avg internet speed
FIBER = BROADBAND
= SPEED
Turkcell Superonline’s fiber broadband speed
SUBSCRIBER & HOMEPASS
to
TURKCELL SUPERONLINE
UKRAINE: SOLID OPERATIONAL PERFORMANCE
13
SMARTPHONE & DATA OPERATIONAL FIGURES
7.4 8.2 8.6
4.6 4.1 4.5
Q212 Q113 Q213
Subscribers (million) ARPU ($)
SUBSCRIBER & ARPU TREND (3-MONTH ACTIVE)
• Regional marketing approach focusing more on value
• Simple, clear voice and data offerings
• Strong subscriber growth in all regions
13%
17% 20%
8% 10%
12%
2011 2012 H113
Smartphone penetration Mobile bb / Total revenues
Note: Smartphone penetration is calculated based on 3-month active subscribers and a smartphone is defined as a terminal with open operating system and hard/soft qwerty keyboard
FINANCIAL OVERVIEW
Murat Erden Turkcell Acting CFO
NOTICE:
Please note that all financial data are consolidated whereas non-financial data are unconsolidated unless otherwise specified.
EBITDA is a non-GAAP financial measure. Please refer to the press release for the reconciliation of EBITDA to net cash from operating activities.
All non-financial data are unconsolidated, prepared in accordance with IFRS and expressed in US$ and/or TRY.
The figures used in this presentation are rounded while percentage changes are calculated based on the figures disclosed in the Q2 2013 result announcement press release.
30.4% 30.4%
(1.3pp) 0.2pp 1.1pp
EBITDAQ212
Δ in Direct cost
of revenues*
Δ in G&A exp.
Δ in S&M exp.
EBITDAQ213
2,279
2,565
2,855
Q211 Q212 Q213
TURKCELL GROUP: REVENUE & EBITDA MARGIN
15
11% yoy
13% yoy
Δ in interconnect
(1.3pp)
REVENUE EBITDA MARGIN
TRY MILLION %
*Excluding depreciation and amortization
2% yoy
534
556
67
4 (6) 30 (19)
(23)
(31)
Net incomeQ212
Δ in EBIT Δ in Interest Inc./Exp.
Δ in Equity in
Net Inc./Loss
Δ in FX Gain/Loss
Δ in Monetary Gain/Loss
Δ in Taxation Δ in Other Net incomeQ213
Q213 vs. Q212 YoY ↑ 4%
TURKCELL GROUP: NET INCOME
16
∆ in EBITDA 90 ∆ in D&A (24)
∆ in interest income (9) ∆ in interest expense 13
TRY MILLION
6,611 7,003
869 (355)
127 (83) (166)
Q113 EBITDA Capex* Net interestincome
Net changein debt
Other cash flowitems
Q213
Corporate tax payment of Turkcell Turkey (120) Working capital (46)
TURKCELL GROUP: BALANCE SHEET & NET CASH DEVELOPMENT
TRY million Q2 2012 Q1 2013 Q2 2013
Total Cash 6,041 6,611 7,003
Total Assets 17,366 18,863 19,554
Total Debt 3,129 3,015 3,120
Net Cash 2,913 3,596 3,883
Total Equity 11,814 13,284 13,777
BALANCE SHEET HIGHLIGHTS
17 * Including operational and non-operational capex
NET CASH DEVELOPMENT
18
THANK YOU For further information please e-mail
investor.relations@turkcell.com.tr or call Turkcell Investor Relations at
(+90 212 313 1888)
20
SUMMARY INCOME STATEMENT AS PER CMB1 FINANCIALS
1 Capital Markets Board of Turkey 2 Depreciation and amortization is included
20
Summary income statement Q2 2012 Q1 2013 Q2 2013 YoY (%) QoQ (%)
Revenue 2,565.1 2,688.4 2,855.2 11% 6%
Direct Cost of Revenues2 (1,570.3) (1,685.7) (1,769.8) 13% 5%
S&M (434.3) (425.0) (452.5) 4% 6%
G&A (122.6) (129.0) (128.9) 5% -
EBITDA 779.0 807.6 869.2 12% 8%
EBITDA Margin 30.4% 30.0% 30.4% - 0.4pp
Net Income 535.8 566.9 558.1 4% (2%)
(TRY MILLION)
21
SUMMARY INCOME STATEMENT AS PER IFRS FINANCIALS
1 Depreciation and amortization is included
21
Summary income statement Q2 2012 Q1 2013 Q2 2013 YoY (%) QoQ (%)
Revenue 1,431.2 1,504.5 1,547.9 8% 3%
Direct Cost of Revenues1 (876.9) (944.2) (959.3) 9% 2%
S&M (242.7) (237.7) (245.5) 1% 3%
G&A (68.4) (72.1) (69.8) 2% (3%)
EBITDA 434.3 452.1 471.5 9% 4%
EBITDA Margin 30.3% 30.0% 30.5% 0.2pp 0.4pp
Net Income 297.4 316.5 302.3 2% (4%)
($ MILLION)
CONSOLIDATED BALANCE SHEET ($ MILLION)
22
Consolidated Balance Sheet ($ mn) Q2 2012 Q1 2013 Q2 2013 YoY (%) QoQ (%)
Cash & Bank 3,344 3,655 3,638 9% (0%)
CURRENT ASSETS 4,771 5,477 5,472 15% (0%)
Fixed Assets, Net 4,063 4,223 3,999 (2%) (5%)
Other Long Term Assets 778 729 688 (12%) (6%)
TOTAL NON-CURRENT ASSETS 4,841 4,952 4,686 (3%) (5%)
TOTAL ASSETS 9,613 10,429 10,159 6% (3%)
S/T Debt 1,348 892 841 (38%) (6%)
TOTAL CURRENT LIABILITIES 2,428 1,958 1,875 (23%) (4%)
L/T Debt 385 775 780 103% 1%
TOTAL NON-CURRENT LIABILITIES 645 1,126 1,126 75% 0%
MINORITY INTEREST (74) (81) (84) 14% 4%
Share Capital 1,636 1,636 1,636 0% 0%
TOTAL EQUITY 6,539 7,345 7,158 9% (3%)
TOTAL EQUITY AND LIABILITIES 9,613 10,429 10,159 6% (3%)
2.33 2.31
2.36 2.40 2.44
2.35 2.32
2.51
2011 2012 1Q13 2Q13
Average Period-End
CURRENCY TRENDS
USD / TRY EUR / TRY
USD / BYR USD / UAH
1.67
1.79 1.79 1.84
1.89
1.78 1.81
1.92
2011 2012 1Q13 2Q13
5.038
8.326 8.627 8.687
8.350 8.570 8.670 8.790
2011 2012 1Q13 2Q13
7.97
7.99 7.99 7.99
7.99 7.99 7.99 7.99
2011 2012 1Q13 2Q13
23
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